Introduction: Baroness Sherlock

Maeve Christina Mary Sherlock OBE, having been created Baroness Sherlock, of Durham in the County of Durham, was introduced and took the oath, supported by Baroness Hollis of Heigham and Baroness Prosser, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord Bannside

Ian Richard Kyle Paisley, having been created Baron Bannside, of North Antrim in the County of Antrim, was introduced and took the oath, supported by Baroness Boothroyd and Lord Morrow, and signed an undertaking to abide by the Code of Conduct.

Introduction: Baroness Drake

Jean Lesley Patricia Drake CBE, having been created Baroness Drake, of Shene in the County of Surrey, was introduced and made the solemn affirmation, supported by Baroness Warwick of Undercliffe and Lord Young of Norwood Green, and signed an undertaking to abide by the Code of Conduct.
	Lord McCluskey took the oath.

Energy: Renewables
	 — 
	Question

Tabled by Lord James of Blackheath
	To ask Her Majesty's Government what steps they are taking to assess the assurances given by the previous Administration on the completion date and costs of the renewable energy programme required to meet the European Union target of a 20 per cent reduction in carbon dioxide emissions by 2020.

Lord James of Blackheath: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I note my former interest as chairman of North Sea Assets plc and British Underwater Engineering plc.

Lord Marland: My Lords, I believe that the noble Lord is referring to the European Union's obligation under the renewable energy directive to source 20 per cent of its energy from renewable sources by 2020, of which the UK share is to achieve 15 per cent renewable energy consumption by 2020. We are committed to meeting the UK's target for renewable energy by 2020, but we want to go further and have asked the Committee on Climate Change to provide independent advice on the level of ambition for renewables across the UK.
	As part of the package of challenging energy and climate change measures, the UK has also signed up to the target of a reduction in new EU greenhouse emissions of at least 20 per cent below 1990 levels by 2020. Actual costs will depend on how the market responds to incentives, on barriers to deployment and on how technology costs evolve between now and 2020. We will continue to monitor and review the uptake of financial incentives and costs.

Lord James of Blackheath: I thank the Minister for that reply. Can he confirm whether his department is able to agree with the former estimates last provided to your Lordships by the previous Government to the effect that they would achieve the target for 2020 with a programme of extensive wind farm developments on Crown properties within a budget to be provided by the Prime Minister of the time-not from his own pocket, I think-of £75 billion? Does that hold good as an achievable forecast today, given that not a scrap of equipment can be contracted for wind farm development until 2020?

Lord Marland: I thank my noble friend for his question.

Noble Lords: Next Question.

Lord Marland: Noble Lords may want brevity of answer over here, but it will not suit Members on those Benches too well if I give that, quite frankly.

A noble Lord: Why?

Lord Marland: Because of lack of performance, I am afraid. However, I am avoiding any confrontation on this issue, so if I were the noble Lord, I would as well.
	The most recent statistics for 2009 show that the level of renewable energy consumed in the UK has reached 3 per cent. This puts us on a trajectory to meet our first interim target under the renewable energy directive, which is 4 per cent by 2012.

Lord Pearson of Rannoch: My Lords, are the Government wise to have committed £18 billion per annum for the next 40 years to combat climate change when the science underpinning it has collapsed? How many British people will suffer fuel poverty as a result of this discredited initiative?

Lord Marland: I am not sure I thank the noble Lord for his question, but his party's views are well known and, I am afraid, do not coincide with ours. We think that climate change is one of the biggest issues to confront the nation. We are putting green awareness on the front of our agenda. We are going to be the greenest Government who have existed and we intend to deliver policies to show so.

Lord Tomlinson: Does the noble Lord regard nuclear-generated electricity as being renewable?

Lord Marland: Nuclear-generated electricity is a fundamental part of our party's coalition policy but I am not sure that it is relevant to the Question in hand.

Lord Teverson: My Lords, is not one of the ways in which we will meet this target much greater use of biogas? How will the UK catch up with other European countries, such as Germany, in terms of anaerobic digestion?

Lord Marland: I thank my noble coalition colleague for that question. For some people who may not have the noble Lord's knowledge, anaerobic digestion needs to be encouraged. It is a recycling of waste-sewerage, animal waste and food waste-that creates biogas. It is a very important development. My honourable friend in the other place, Mr Greg Barker, has organised a stakeholder event in the Recess to discuss the development of this kind of renewable energy.

Lord Howarth of Newport: My Lords-

Lord Lawson of Blaby: My Lords-

Lord Strathclyde: There must be room for both noble Lords to speak. Why do we not have first my noble friend Lord Lawson and then the noble Lord, Lord Howarth?

Lord Lawson of Blaby: I am grateful to the Leader of the House. Is my noble friend aware that only a couple of days ago, Mr Bob Wigley, the chairman of the previous Government's Green Investment Bank Commission, stated that meeting the requirements of the absurd Climate Change Act will cost the United Kingdom £50 billion a year, every year, for the next 40 years. How-above all in this age of austerity-can this possibly be justified?

Lord Marland: I am very grateful to noble Lords for fighting over a question for me; it is quite rare in this job. However, I must correct my noble friend; the Green Investment Bank was an initiative set up by our own party and one must not rule out the phenomenal business opportunities that it offers for this country. We must have 2 million heat pumps by 2020. We must have bioenergy, which will create 100,000 jobs at a value of £116 million. Wind alone should create 130,000 jobs at a value of £36 billion. At a time when the country needs investment, these are heartening numbers.

Baroness Ford: At a time when the country needs this investment so badly, how does the Minister propose to meet those renewables targets without the benefit of an independent Infrastructure Planning Commission, which this Government are committed to abolishing?

Lord Marland: I am very grateful to the noble Baroness for her question. She is quite right; the planning process is fundamental to renewable energies and we have to put great emphasis on it, and I am afraid that we have to accelerate it because it had become stuck in a mire. I am not sure that the IPC is the right method for doing that. We shall put energy into reforming that area. I am grateful to the climate change committee for recommending it.

Lord Howarth of Newport: My Lords, in seeking to pursue their laudable aim of increasing the proportion of energy consumption supplied by renewables, how will the Government ensure that the landscape of this country is not disfigured by a rash of ill-planned wind turbines?

Lord Marland: I am grateful for that question. Under the previous Government, 14 gigawatts of onshore turbines were approved, 70 per cent of which is under way. It is our determination that there should be no dramatic increase in this and that the emphasis should be offshore, where the supply of wind is much more reliable. There are of course constraints in the environment, to which the noble Lord referred, and fishing and shipping communities need to be listened to, but offshore is the future for this country.

Wealth
	 — 
	Question

Lord Sheldon: To ask Her Majesty's Government what proportion of wealth is held by the richest 10 per cent of the population.

Lord Sassoon: My Lords, there are different methods of calculating wealth. HMRC personal wealth statistics estimate that, in 2005, the latest year for which data are available, the top 10 per cent of individuals owned 54 per cent of total wealth. The wealth and asset survey, a new survey measuring wealth across Great Britain, estimates that, between 2006 and 2008, the top 10 per cent of households owned 44 per cent of wealth. However, the wealth and assets survey uses a different methodology from the HMRC statistics.

Lord Sheldon: That does not take into account the period from 2000, which was my original question, and how the population varied during the period of the Labour Government. The richest 10 per cent must have been rather wealthier than the Minister said. What action has been taken to reduce the level of wealth?

Lord Sassoon: I am grateful to the noble Lord for asking what action was taken during the period of the Labour Government to reduce wealth inequality, because I can give him the statistics. The HMRC survey showed that the top 10 per cent of households in 1997 owned 54 per cent of the wealth; in 2005, they still owned 54 per cent of the wealth. The Gini coefficient, which your Lordships will be aware measures the dispersal of wealth, had risen marginally from 69 per cent in 1997 to 70 per cent in 2005. That probably shows that whatever action was taken had no appreciable effect.

Lord Bilimoria: My Lords, does the Minister agree that the question should be not how much wealth does the richest 10 per cent hold, but how much wealth does the richest 10 per cent generate for this economy? What are the Government doing about the worry of driving away some of the most talented people through the 50 per cent rate of tax, the non-dom levy and increased CGT? Surely we should be attracting more wealth creation. On the other hand, with regard to the question before about the previous Government and reducing child poverty, is it not shocking that we should have child poverty in one of the wealthiest nations in the world?

Lord Sassoon: My Lords, I am grateful to the noble Lord, Lord Bilimoria, because he enables me to say yet again how important it is that wealth generation is created and that the balance of the economy is switched from overdependence on the public sector and debt to dependence on the private sector and equity. That is why he did not mention-but I will-the reduction in corporation tax, the fact that CGT did not go up anything like as much as people had feared and a number of other measures in the Budget. He is right to draw attention to child poverty because the previous Government failed to meet their target of halving it by 2010.

Lord Roberts of Conwy: My Lords, is it not true that the gap between the richest 10 per cent and the poorest 10 per cent is actually at its greatest for 40 years? The party opposite were in Government for the best part-no, not quite the best part, but for 18 years, or almost half-of that 40 years. If we were in the blame game should they not take responsibility?

Lord Sassoon: My Lords, I completely agree with my noble friend. The policy of this Government is to increase wealth across the wealth distribution for everybody.

Lord Eatwell: My Lords, does the Minister agree that one of the most important political ideas of the past 50 years is that of a property-owning democracy? Conservative thinkers must get due credit for the development of that idea. Why, then, have the Government abolished child trust funds, the first measure in the history of this country to give every child a stake in the wealth of the nation?

Lord Sassoon: My Lords, there are simply some measures that, in the present fiscal position, are unaffordable. The child trust fund, regrettably, falls into that category. However, to ensure that children at greatest risk are protected, we have introduced above-indexation rises in child tax credit. If noble Lords look at the new tables set out in the Budget document on pages 64 to 70, they will see that the effect is progressive across all income bands.

Lord Newby: My Lords, does the Minister accept that one way to stop disparities in wealth growing disproportionately is for the wealthy to pay their taxes? The Government have at long last announced a review looking at the possibility of introducing a general anti-avoidance rule. Will the Minister assure the House that this review will be finished in time for legislation on this matter to be introduced in the next finance Bill?

Lord Sassoon: My Lords, the coalition agreement indeed commits the Government to make every effort to tackle tax avoidance. There was a Budget press notice on eight initiatives that we are taking. One is to examine whether the option of a general anti-avoidance rule should form one element of strengthened defences against avoidance. I assure my noble friend that there will be informal consultations on this possible anti-avoidance rule over the summer.

Lord Foulkes of Cumnock: My Lords, may I ask the Minister a very simple question? What proportion of wealth is held by members of the Cabinet?

Lord Sassoon: I suspect that it would not register significantly on the data.

Lord Pearson of Rannoch: My Lords, whatever the views of the Benches beside me and opposite me, does the Minister not agree that in socialist societies the differential is very much sharper than in democratic and capitalist societies? Does he, for instance, recall that in the Soviet Union some 95 per cent of the wealth and influence was controlled by less than 2 per cent of the population?

Lord Sassoon: My Lords, I have been looking for international comparison data, which are very hard to come by. I certainly do not know of any reliable statistics for the former Soviet Union. In the latest data of which I am aware, which is an Economic Policy Research Institute survey in 2000, the USA has the top 10 per cent of households earning 69.8 per cent of wealth, France is on 61 per cent, the UK on 56 per cent, Germany on 44 per cent and Japan on 39.3 per cent.

Disabled People: UN Convention
	 — 
	Question

Baroness Greengross: To ask Her Majesty's Government what steps they are taking to implement the United Nations Convention on the Rights of Persons with Disabilities.

Baroness Greengross: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I declare an interest as a member of the Equality and Human Rights Commission.

Lord Freud: My Lords, this Government are committed to the Convention on the Rights of Persons with Disabilities and to using it as a driver to achieve equality for disabled people. The Office for Disability Issues is co-ordinating implementation, monitoring and reporting across government and the devolved Administrations to ensure that they are aware of the need to take the convention into account in developing policies, and that they involve disabled people and their organisations in doing so.

Baroness Greengross: In thanking the Minister for his reply, I recognise the huge resource challenge we all face and I welcome the Government's commitment to ensure that fairness is at the heart of any financial decisions that will be made. In light of the recent announcements around welfare reform, including incapacity benefit and disability living allowance, and the possibility of a delay in implementing the Equality Act, can the Minister assure the House that every step is being taken to make sure that spending cuts do not impede the implementation of the UN convention and that full equality impact assessments are carried out so that the impact on disabled people is actively and appropriately considered?

Lord Freud: My Lords, I am grateful to the noble Baroness for her informed questions, which I know come from her interest in and passion for equality issues. I can assure her that we will treat this convention with great seriousness and will push ahead to make sure that it does not slow down. Next July, we are due to report on progress in this area. We will be pushing to make sure that we do so to time. I can also assure her that in our welfare reforms we will look precisely at making sure that those who need support the most continue to receive it.

Baroness Campbell of Surbiton: My Lords, one-third of disabled people live below the official poverty line, which does not measure the additional costs of disability. Under the UN disability convention, the Government must promote the right of disabled people to an adequate standard of living and social protection. Will the Government's review of the disability living allowance and, more importantly the recent closure of the independent living fund to new recipients breach that obligation?

Lord Freud: My Lords, when we look at our obligations under the convention, we are clearly looking at a journey towards complete equality for disabled people. It would be naive to claim that within one bound we shall produce total equality. This has been a long journey, which started many years ago. We are committed to press on and make sure that as we move ahead we produce greater equality and improve the lot of disabled people steadily as the years progress.

Lord Ashley of Stoke: The Minister's assurances are welcome, but how do the Government explain the reservations that they have made? It is not so much the question of individual reservations, but the cumulative effect of all four of them. It gives the impression that the British Government are not interested and certainly are only lukewarm towards the issues covered by the four reservations to the convention. How does the Minister square that?

Lord Freud: My Lords, we have four reservations on this convention, and there are two ways of looking at that. A large number of countries have signed-145 of them, and 87 have ratified. We have taken this convention with great seriousness and looked through the implications of applying it, rather than looking at it as a purely aspirational matter. Of those four reservations, we are working extremely hard to ensure that we can remove two of them.

Lord Addington: My Lords, when we are dealing with disability matters we tend to pass a lot of legislation, then have to go back and pass legislation again on the same subject. Have the Government decided whether we have the legislative framework to enact the United Nations convention? If we do not, when will it be in place? May we know as soon as possible?

Lord Freud: The United Nations convention is not a matter of law in this country or in Europe. It is a convention that holds us to account on our performance, and on which we report back to the UN. We will do that in July.

Lord Knight of Weymouth: My Lords, Article 28 of the convention promotes the right to an adequate standard of living. Elsewhere, the convention requires that all activities must include the participation of persons with disabilities. How have persons with disabilities been involved in the decisions in the Budget that show, in table 2.1 of the Red Book, that £360 million in 2013 and then over £1 billion in 2014 will be cut from the disability living allowance?

Lord Freud: My Lords, this is the first time that I have had a chance to welcome the noble Lord to these Benches. As he points out, part of the convention says "nothing about us without us", and we take that seriously. We will go through the normal Budget processes in terms of ensuring that equality and human rights issues are dealt with.

Lord Low of Dalston: My Lords, the Minister will be aware that the European Parliament is currently considering a draft regulation on the rights of passengers on bus and coach transport. Will he assure me that the British Government will support the inclusion in this regulation of stronger rights for disabled people in line with Article 9 of the UN convention, particularly with regard to the provision of assistance and accessible information?

Lord Freud: As I said, my Lords, we are determined to implement this convention. We have four reservations, but transport is not one of them. We will be implementing it in as proportionate a way as we can.

House of Lords: Reform
	 — 
	Question

Lord Campbell of Alloway: To ask Her Majesty's Government what process will be used by the House of Lords reform committee to give instructions to Parliamentary Counsel for a draft bill.

Lord McNally: My Lords, instructions to parliamentary counsel will be drafted by officials in the usual manner, based on decisions made by the committee.

Lord Campbell of Alloway: My Lords, I thank my noble friend for that response. The take note debate raised two questions of due process relating to this Question, which, in effect, has not been answered. I am afraid that I cannot answer it; I did not set up the committee. I suspect that the only person in your Lordships' House who can really answer it is my noble friend the Justice Minister. In the mean time, though, there is a problem about this process. There are two aspects.

Noble Lords: Too long!

Lord Campbell of Alloway: I am sorry. I will sit down.

Lord McNally: My Lords, because, as the noble Lord said, the debate raised the issue of due process, I was very careful to make inquiries about whether it could be suggested that anything that was taking place was not being done with due process. I am advised that parliamentary counsel will draft the Bill, which the Government plan to publish before the end of the year, based on clear instructions provided by the departmental lawyers, and that this is normal practice.

Lord Dubs: Does the Minister agree that every Minister should be accountable to one House or the other in Parliament and that it is therefore an anomaly that the Minister without Portfolio in the Cabinet Office is apparently not answerable to anybody in either House? Will the Minister ensure, in feeding in to this process, that all Ministers are accountable?

Lord McNally: I cannot believe that that is not the case. Perhaps the noble Lord will write to me on it; otherwise, I will report what he suggests to the Cabinet Office. I think that I have seen most Ministers up for Questions. If the Minister is in another place, it is open to Members of another place-

Lord Dubs: It is this House.

Lord McNally: Ah, I know where we are now. Why does the noble Lord not try putting down a Question to her?

Lord Maclennan of Rogart: Can my noble friend give a little further advice on the status of the committee, which, although appointed by the Government, includes a representative of the Opposition? None the less, the Leader of the Opposition in this House, the noble Baroness, Lady Royall, described it as a Cabinet committee. Does it have that authority and collective responsibility? Secondly, what steps will be taken to enable representations to be made to the committee that are germane to the work of the committee in the form of advice, given that the noble Baroness said to the House that the committee's proceedings could not be made clear or transparent? Are we not all interested in helping constructively? If we are to help constructively, can we be given some greater indication of how we can do so?

Lord McNally: I am very much aware of just how constructive most of this House wants to be to the committee and I am grateful for that. It is not a Cabinet committee; it is a working group that is drawing up a draft Bill. The reason why the Opposition accepted the invitation to join the group is that, prior to the election, a great deal of the work had been done by a similar committee under the chairmanship of Mr Jack Straw. That committee left a good body of work for this group to get ahead in its work in drawing up a draft Bill.

Lord Christopher: My Lords, I understand that the Cabinet rules on legislation require an impact assessment and a cost-benefit analysis. Indeed, the Government were criticised only recently for not producing them. In the case of this government draft legislation, it seems ludicrous that the House should discuss something without knowing what the consequences will be.

Lord McNally: Those matters can be fully scrutinised by the pre-legislative scrutiny committee when it sees the draft Bill. I emphasise that this committee is working on a draft Bill, which will be subject to pre-legislative scrutiny, when there will be a lot of opportunities to look at both the impact and the cost.

Lord Grocott: My Lords, as I previously understood it-the Minister has made it much clearer to me now-the agenda and the minutes of the committee could not be made public because the committee was a Cabinet committee. The noble Lord has now told us that it is definitely not a Cabinet committee. Given that this Government have trumpeted their commitment to transparency and openness, on which the Deputy Prime Minister has been in the lead, why on earth cannot the agenda and the minutes be published? If the noble Lord tells me that they cannot be, what offence would be committed if, for example, I were to ask my noble friend the shadow Leader of the House to let me have a copy of them?

Lord McNally: I am sure that the Leader of the Opposition would honour what has been set out by the committee. This is a drafting committee and we are working with due speed to produce a draft, which will then give the opportunity for the real work that Lords reform requires. I think that the House is getting overexcited about this. We are receiving advice and written submissions and we are working hard to be able to give the House what I have described before as a bone for it to chew on. I think that that is the best way forward for Lords reform.

Lord Jones of Birmingham: My Lords-

Noble Lords: Time.

Arrangement of Business
	 — 
	Announcement

Baroness Anelay of St Johns: My Lords, at a convenient point after 4 pm, my noble friend Lord McNally will repeat a Statement on political and constitutional reform, followed immediately by my noble friend Lord Hill of Oareford repeating a Statement on education funding.

Transport
	 — 
	Motion to Take Note

Moved By Earl Attlee
	That this House takes note of the case for safe and sustainable transport and its role in generating future economic growth and prosperity.

Earl Attlee: My Lords, I am very grateful to the usual channels for giving us the opportunity to have a full debate on transport matters, and in prime time. The provisions of the Companion apply but we have no overall limit on time, and that is a pleasant change from our normal ration. We have an excellent list of speakers who have much experience and knowledge in the field. The noble Lord, Lord Davies of Oldham, has spoken on transport from the Front Bench for many years, and I am delighted that he will continue to do so. I am sure that he will give me not only a run for my money but the benefit of his wise counsel.
	Transport is, and always has been, an integral part of a strong economy and a free society in the UK. It was 250 years ago this month, 180 miles to our north on the Duke of Bridgewater's estate, that excavation work began on the central section of a groundbreaking canal linking the coal mines at Worsley Mill to factories in the heart of Manchester. The Bridgewater Canal revolutionised transport in this country, and the boom in canal building that followed its construction unleashed a wave of industrialisation that transformed Britain into the richest nation on earth.
	This country's history has long borne witness to the importance of transport in supporting its economic and social development. As a proud maritime power, for centuries our ships have carried goods to and from the furthest-flung corners of the globe. In the decades following George Stephenson's pioneering trial of his Rocket locomotive in 1829, we became the first country to develop a comprehensive railway network, carrying our citizens and commerce between towns and cities the length and breadth of our island. In the 20th century, the motor car brought unprecedented personal freedom to millions, while air travel shrunk space and time and, in doing so, opened markets, spread trade, connected countries and brought people and communities closer together than ever before. We now live in a globalised world. We are interconnected and interdependent-socially and culturally, economically and environmentally. What binds, links and supports us is transport. So, as we stand here in 2010, our duty is to build on the successes of the past and continue with the task of delivering a transport system that is safe and accessible; that supports communities and spreads opportunity; and that sustains the economy and safeguards the environment.
	Noble Lords will note that safety was deliberately the first issue I listed. I did so because safety will always be paramount in this country's transport systems. We have a duty to ensure that our citizens are conveyed on the safest aircraft, the safest ships, the safest trains and the safest road vehicles. We are fortunate that the UK is already a world leader on safety. The latest figures show that the number of people killed in road accidents fell by 12 per cent, from 2,538 in 2008 to 2,222 in 2009, but this still leaves us facing a toll of more than six deaths per day-a cost in life and suffering that, of course, remains far too high. We need to switch to more effective ways of making our roads safer while ensuring that we do not curtail Britain's tradition of freedom and fairness through an obsession with new fixed cameras and "spy in the sky" technology. Fatal drink-drive accidents and fatalities are now at their lowest-ever level after falling by three-quarters since breath testing was launched 40 years ago. We need to continue to tackle drink and drug driving in the most effective way possible to protect law-abiding motorists, and we are committed to introducing drug-testing kit for drivers as soon as possible. We hope to have it in police stations as soon as next year.
	Driving is an important life skill and calls for continued and lifelong learning, and I say this as an out-of-date qualified Army driving instructor. The Government are therefore considering what improvements could be delivered to the traditional driving test as well as steps beyond to ensure that we are developing people to become, and stay, safe and responsible drivers. We will be looking closely at the availability and delivery of products that help qualified drivers to maintain and develop their driving skills, including Pass Plus, additional training with the possibility of an assessment aimed at newly qualified drivers, advanced training and remedial training offered to drivers responsible for collisions or infringements of motoring law.
	It is not just essential that we take the right steps to protect those who use transport; it is vital that we take the right steps to protect the planet from our transport system's damaging side-effects as well. Climate change imperils our planet-that is scientific fact. We cannot side-step this challenge and we cannot ignore it in the hope that it will go away. We have to face it head on and transport has to be front and centre of our efforts. Transport accounted for more than a fifth of UK greenhouse gas emissions in 2009, so we must be prepared to deploy a wide range of levers to cut carbon emissions and decarbonise the economy. While this is a challenge, it is also an opportunity, and transport has a central role to play in the creation of new green jobs and technologies. A cleaner tomorrow demands a cleaner transport sector-a transport sector that is more sustainable, with tougher emissions standards and support for new transport technologies. We are determined to protect our environment as well as strengthen our economy. That is why we regard a low-carbon future as the only viable future for Britain.
	The vast majority of transport's contributions to greenhouse gas emissions come from road transport. That is precisely why it is so crucial that sustainable alternatives to the internal combustion engine are developed and given the appropriate support. Currently, half of all car journeys are between one and five miles in length while close to half of all car journeys for education purposes are less than two miles. If we could replace as many of these car trips as possible with the cleaner and greener travel alternatives of walking, cycling and public transport, we could see significant reductions in greenhouse gas emissions-and that is in addition to the improvements in health, air quality and traffic congestion that would result.
	These benefits to our shared environment, our individual well-being and our collective quality of life mean that this Government are committed to sustainable travel initiatives as well as to the encouragement of joint working between bus operators and local authorities.
	It is also vital that a new generation of low-emission vehicles emerges to take the place of the UK's current fleet. I can tell your Lordships that the Government are committed to fostering the development of electric and plug-in hybrid vehicles with plans to mandate national vehicle charging infrastructure on top of a smart grid and smart metering for electricity. As well as the obvious environmental benefits, the shift to ultra-low-carbon technologies is an opportunity to reinvigorate the UK automotive industry. The sector already employs 180,000 people in manufacturing and adds £11 billion to the economy each year, and this Government are continuing to work with industry to realise the business opportunities from the global transition to low-carbon technologies.
	Beyond any question, rail will have a central role to play in building a greener future for our country. The Government support a truly national high-speed network connecting key cities across the country. We also support Crossrail and the further electrification of the rail network. Taken together, these railway projects have the very real potential not only to generate economic growth but to encourage a modal shift of people and freight from long road journeys and short-haul flights.
	The fact that we are pro-environment does not mean that we are anti-aviation. Yes, we recognise the environmental impact of aviation and believe that we must seek to reduce that impact, but we are also a Government who understand fully and appreciate absolutely the positive social and economic contribution that aviation makes. To strike that balance between aviation's environmental impact and its socioeconomic benefits, the Government are working for a better, rather than a bigger, Heathrow by shelving plans for a third runway there. We will also explore changes to the aviation tax system, including switching from a per-passenger to a per-plane duty, which would encourage a switch to fuller and cleaner planes.

Lord Clinton-Davis: If there is to be no expansion of Heathrow, will other airports be available? If so, where? It is incumbent on the present Government to identify this important issue of regulation.

Earl Attlee: My Lords, one of the reasons why I have looked forward to this debate is the opportunity it will provide to listen to the noble Lord's full contribution-which I know he is looking forward to making. When I wind up the debate, I will be in a position to give him a full answer.
	More broadly, we are also committed to reforming the way that decisions are made on which transport projects to prioritise, so that the benefits of low-carbon proposals, including light rail schemes, are fully recognised.
	Transport matters. It matters because it fosters economic growth, and it matters because it connects companies to markets and customers. Transport matters because it increases competition, spreads innovation and produces economies of scale. It matters because it improves labour market flexibility at home and opens up business opportunities abroad. Above all, transport matters because, when it is safe and sustainable and when it works at its best as the great connector, it can improve beyond measure our economy, our society, our communities and our environment. An investment now in transport is an investment in recovery, renewed growth and our children's prosperity.
	I am convinced that, just as canals shaped our national life in the late 18th century, our transport networks can transform Britain for the better in the 21st century. Modern transport in a modern Britain means a country equipped to compete in a globalised world-a country with an economy that is strong and stable, an environment that is clean and green, and a society that is free and fair. That is what safe and sustainable transport can achieve. That is its potential for progress-a potential that this country's ports, airports, railways, motorways, bus lanes, cycle lanes and paths all have a part in delivering. Few in this House would underestimate the role that a safe and sustainable transport has in building a better Britain, and I look forward to all your Lordships' contributions in the debate to come. I beg to move.

Lord Snape: My Lords, first I apologise to the noble Earl for missing the first three minutes of his speech. I am afraid that I was running late, as was the Virgin train that I came down to London on this morning. However, it is about time that those of us who participate regularly in these debates in your Lordships' House paid tribute to those in the transport industries generally, and certainly in the railway industry, for the high level of passenger satisfaction that has been demonstrated in recent months. The PPM for our railways is running at about 94 per cent, which reflects enormous credit on those who work in the railway industry. We ought to give credit where credit is due and pay tribute to railway men and women at all grades for the efforts that they are making and for the high levels of passenger satisfaction that have been demonstrated throughout the country.
	Having apologised to the Minister, I now thank him. He sent me a handwritten note last week thanking me for participating in this debate. Whether he will send me another one when I sit down remains to be seen. However, it is the first time that I have received such a note from a Minister, and I am grateful for it.
	A very short time is available to all of us who are participating in this debate. The Minister is right that good and efficient transport is essential for a civilised society. I start with a warning to the noble Earl, Lord Attlee, and to the Government, about the so-called draconian cuts that are planned-if the media are to be believed-across our transport industries. The new Secretary of State did not make a particularly good start when he talked about the new Government's policies ending the war on motorists. It is a pretty phoney war, because the cost of motoring has fallen in real terms since 1997 compared with the cost of travelling by both rail and bus, which has increased in real terms. I hope that his future pronouncements on government policy, and his actions, will be based on reality rather than prejudice.
	The Government are seeking to make many savings in the transport budget. I will presume to make some suggestions to the Minister, which I hope he will accept in the spirit in which they are offered. Certainly, there is a problem with Network Rail. I probably carry both sides of the House with me when I say that various obvious savings can be made in the Network Rail budget. There are three things wrong with Network Rail: its governance, its performance and its prices. There is a lot wrong with its governance. I have had the privilege of serving on a couple of boards in my career. Any board that has more than 100 members is a recipe for chaos. I am not sure why Network Rail's governance is as chaotic as it is, or why it has so many people on what is not a board of directors but merely an advisory group. Perhaps the best size of a board is five or six; it is certainly a lot less than 100.
	We all know why Network Rail was created in the way that it was; it was an attempt by the previous Government to keep their expenditure off the PSBR. Laudable though that may be, it is no way to run a business to have an advisory board of the size that Network Rail has. I hope that the Government will look again at this. At the moment, Network Rail appears to be neither fowl nor good red herring. If it is to be run properly, the Government have to look again at its overall governance.
	The Government should also look at Network Rail's performance. All too often, these debates become a series of "All Our Yesterdays" stories, but from my time in the railway industry I seem to remember the much maligned British Rail being far more efficient than Network Rail is at present. As an 18 year-old newly qualified signalman in 1960-that rather gives my age away-the old BR managed to resignal Manchester London Road, as it then was, in a weekend. The semaphore signals dating from 1908 were swept away and scores of colour light signals were put into what became Manchester Piccadilly. Actually, it did not work out quite as well as BR had hoped, as I think it was about Wednesday before we were able to run a comprehensive service. However, for all that to be done in four days, although the target was two, far surpasses anything that Network Rail can do at the moment. I live very close to Yardley Wood station in Birmingham. Only last year, Network Rail decided to resignal the Stratford line, which passes my home. It was necessary to close the line on successive weekends and then for the line to be completely closed for 10 or 12 days in order to install a dozen signals and a new junction at Tyseley. BR could do things far better than that. Network Rail has to toughen up its performance if it is going to match what BR managed to do quite easily in the past.
	The other aspect of Network Rail's performance is price. I was at a recent meeting of the All-Party Group on Rail at which officers of the Office of Rail Regulation were present. They talked about benchmarking Network Rail. How do you benchmark a monopoly? Perhaps the Minister can tell us how that can be done. Is it necessary to have a monopoly such as Network Rail? After all, rail companies such as ScotRail run an organisation that is largely separate from the rest of Network Rail. Why not allow ScotRail to maintain its own track and infrastructure? There could then be a proper comparison between the costs there and those of the rest of the railway network. Why not let Merseyrail, for example-again, an organisation that is virtually completely separate from the rest of the network-operate and maintain its own track on Merseyside? Surely that would be the best way to benchmark Network Rail, where the simplest job appears to cost hundreds of thousands of pounds. If the Government genuinely want to save money-I understand their reasons for wanting to do so-why not have proper cost comparators such as that? As long as Network Rail is allowed to maintain its own monopoly, we will never really know the true cost of major railway works, and we have to accept the costings before, during and after as laid down by Network Rail.
	There are other areas that I hope Her Majesty's Government will look at. In the West Midlands, for example, close to my former constituency of West Bromwich is a company called Parry People Movers, which operates about 700 or 800 yards of line between Stourbridge Junction and Stourbridge. It has achieved a 99 per cent reliability rate on that stretch of line. Why-this is not a political point; it happens under all Governments-do we find it so difficult to innovate within the railway industry? Why are we so hidebound and traditional as to insist on rolling stock being made to the highest possible standard and with the tracks being maintained as though Pendolino trains will run at 125 miles per hour throughout the network? Why cannot we have a cheap and cheerful branch line perhaps run by Parry People Movers? I hasten to add that I have no direct connection with the business. Some years ago, John Parry, the chairman, asked whether I would be interested in joining his board. At that time, I was working for a rather bigger organisation called National Express, so, probably to his relief, I had to turn him down.
	This is an area in which genuine savings could be made. We could operate a cheap, or cheaper, railway system on some of our threatened branch lines. Indeed, we should consider reopening some of them, but that cannot happen at present because of the costs of operating the current railway system.
	I hope that the Government will look not at slashing front-line services or cutting railway infrastructure but on making the present system work more cheaply and efficiently. I hope in the 10 minutes or so available to me that I have been able to give the Minister some food for thought and that the Government will see that we depend on the railway industry economically as we do on other forms of transport.
	I wish that I had time to talk about buses and aviation, but I know that other noble Lords want to participate in the debate and I do not want to take up too much time. The transport industry can do a lot to boost the economy of the United Kingdom, so please let us not slash infrastructure or front-line services.
	Going back to my BR days, all too often when cuts had to be made it was the night-turn shunter who lost his premium payments on Saturday and Sunday nights. The problem with the present railway industry is that it is overmanaged and undersupervised. All too often when things go wrong, managers are far away and not in a position to put things right and no one on the spot has the ability, knowledge or authority to do what is necessary to combat either delays or dislocations. The Government could genuinely save money in those areas while preserving the best of our railway industry.
	I wish the Minister all the best in his new post and hope that he can convince the Secretary of State that clichés such as "Ending the war on motorists" are not the right way forward. I also hope that he can find some time to write me another letter saying that not only are the Government taking some of my strictures on board but that they are prepared to act on them.

Baroness Scott of Needham Market: I take this opportunity to congratulate the noble Earl on his appointment. In the short time with his brief he has already shown himself to be an assiduous Minister and I look forward to working with him on transport issues in the coming months and years.
	In his opening remarks he talked about the fundamental role that transport plays in the economic, social and environmental well-being of the community. My interest in transport developed in a much less dramatic way as a councillor in Suffolk when I realised fairly quickly that probably nine out of 10 pieces of casework related to transport in some way or another, whether it was home-to-school transport, a dangerous crossing, an inability to access some sort of public service, or the state of the roads. I have always been interested in the enabling role that transport plays, and the fact that many good policy interventions made by government and local authorities failed to work because nobody properly thought through the transport dimension.
	I have never made a pretence of having any great technical expertise on transport but I have a great admiration for those who do. The UK transport industry is a major employer throughout the country. In the past 20 years huge structural changes in the industry mean that transport is much less the preserve of the public service than it used to be and there is huge variation in the size of the organisations concerned, from large multinationals to small specialist companies-indeed, Parry People Movers.
	The Brunel report published in November 2008 reported a supply of 87,400 people working in engineering, the technical field and planning across the transport industry. That compared to a demand of 96,900. While I acknowledge that the cancellation or postponement of some projects may have reduced the skills gap, it still exists. The challenge on how to mix economic growth with a low-carbon economy is set to increase the skills shortage in coming years. If we do not meet that challenge our future prosperity will be jeopardised.
	Currently, the average age of a chartered engineer is 57. That may be young compared to the membership of this House, but the reality is that over the next decade a huge part of the current knowledge and experience in the transport engineering industry will be retiring. While there are many young people graduating into engineering, many of them then do not go on to work in engineering-they go off and do other things, which are usually better paid.
	Young people are required to make a choice about their subject options about 12 years before they would expect to become a chartered engineer or transport planner, so a choice made about topics and subjects this year will affect a young person qualifying in 2022, or thereabouts. Operating on these timescales does not sit comfortably with short-term planning and stop/go investment. Advanced apprenticeships, support for 14 to 19 diplomas and supporting STEM subjects all need funding, and what is more they need employers who have the security of knowing that they will have predictable income streams to pay for the training. Statutory regulations on apprenticeships should be looked at to ensure that they are cost-effective, accessible and manageable, especially for small businesses.
	Furthermore, it does not stop with young people. At all levels, changing skill requirements, new and safer working practices, green technologies and other developments mean that the need for training and development is continuous. The costs of that always fall to the industry, which is another reason why industry needs stable investment flows.
	The need for skilled, specialised personnel in the transport sector is crucial and will remain so. The supply cannot be turned on and off at will. It takes a considerable time to develop such people, and the timescale goes way beyond our current financial challenges.
	At this time, we have to consider a simple economic case: stop/go work flows will make it difficult for even the most enlightened employers to go on investing in good training and development. A lack of short-term prospects could drive skilled people to other sectors or abroad. The result of those two things could exacerbate the skills shortage, driving up costs, when the upturn comes. If the skills base is too far eroded, there will be a real lack of capacity to provide the transport infrastructure needed to sustain growth. The transport industry needs a long-term vision and strategy so that it can resource the skills needed for a low-carbon economy in the future.
	I want to say a few words about transport spending in the current environment. In roads, focusing on maintaining the existing asset and using it more effectively should be a priority. It is usually easier to commission and has more immediately visible results. Reactive maintenance-in other words, response to damage-is an inefficient way of dealing with the highway. Planned preventive maintenance offers better value for money and is more efficient.
	Road safety is not just a matter of quality of life -often literally-although that is clearly uppermost in our minds. It is also a question of value for money -savings for the NHS in dealing with the injuries caused by road traffic accidents, but also the long-term care required by people with the most severe injuries. Yet there are very few training requirements for people in road safety specialisms, and what little there is is provided by local authorities on a discretionary basis. Of course, when money is tight, discretionary services, especially training, tend to be high on the cuts list.
	It is possible to build incentives for training into our procurement processes. For example, the East Midlands Highways Alliance is a collaboration of a number of companies and local authorities whose aim is to improve highways services in the region, and includes the development of a skills academy. The savings to its partners have been huge over recent years.
	I have always used trains and, since becoming president of my party, have spent an inordinate amount of time on the railways. I have seen them at their best, and I have seen them at their worst. My overwhelming feeling is that the current franchising scheme, and the highly complex regulatory regime within which the rail industry has to operate, has completely lost sight of the needs of the passengers. I hope that the very welcome review of the franchising system will at last begin to put the passenger first. The fares system is in chaos and there is a widespread lack of understanding of how it works, even among the staff who operate the system. Queues for tickets are at unacceptable levels and should be dealt with as a priority. There are far too many bus substitutions and too few visible staff to help when things go wrong. When passengers complain to train operators, they are often told that their freedom to respond to passengers is hampered by franchises which are overregulated and micromanaged by the Department for Transport. Surely departmental oversight should be focused on the things that really matter: punctuality, reliability, cost and, above all, passenger satisfaction.
	It is surely no coincidence that the three train operating companies with the highest performance and passenger satisfaction are those with the longest franchises. Can the Minister tell us the Government's thinking on longer franchises? Does he agree that the decision to award a franchise should not be on cost alone; it should be on improving service quality and how much the operator is prepared to put in? With refranchising of the west coast main line due in 2012 and of the east coast main line next year, and with the whole question of my local, rather benighted, rail franchise, National Express East Anglia, can he tell us whether they will come under the new regime which is currently under consultation, and what will be the timetable? Furthermore, will he say something about rolling stock? There is clearly a need for new rolling stock, but at the moment there seems to be a huge amount of unnecessary government intervention between train operators and the roscos.
	I am very pleased that this House has had the opportunity to debate transport matters at this early stage in the life of the new Government. I look forward to contributions from other noble Lords. The importance of transport in all areas of our lives is not always recognised, and it is good that it has been today.

Lord Liddle: My Lords, I thank the noble Earl for moving the Motion and enabling this debate. I have a long-standing interest in transport questions. My dad was a railway clerk for most of his life and a member of my noble friend Lord Rosser's trade union. My first job in national politics was working for the noble Lord, Lord Rodgers of Quarry Bank, as a special adviser in the Callaghan Government when he was Secretary of State for Transport.
	Today, I shall talk about transport issues from a regional perspective, and specifically from a Cumbrian perspective. I declare an interest here as chairman of Cumbria Vision, which is the sub-regional economic development body for the county of Cumbria.
	The question of transport connectivity is crucial to the future of the north of England at this time. Like many parts of the north, Cumbria is heavily dependent on the public sector. The county council undertook an analysis which shows that of all types of different public expenditure, we in Cumbria get £2 for every £1 we contribute in tax, so we are very vulnerable to the cuts in public expenditure now in prospect.
	That also means that the economic priority for the north of England has to be to grow the private sector. The private sector can grow-we can attract new businesses to the north-only if some key facilitators of growth are in place. Some of those are skills and some of them are adequate industrial sites. Digital connectivity is important, but crucial is transport. Investment in safe and sustainable transport is vital. I hope that the Government recognise at this time of public spending restraint and cuts that if they want private sector growth and inward investment in places such as the north of England, they must continue to provide favourable public investment, especially in transport, to support it.
	We have seen in recent years a great improvement in rail services. When I was a boy, if you wanted to go from Carlisle to London, there was a train that left Carlisle at 8.40 and it got in at four o'clock in the afternoon. Most people who wanted to go to London from Carlisle went overnight, and the station was busiest as people were getting on overnight trains. Nowadays, with the west coast main line modernisation, the journey takes about three hours and 20 minutes, so there has been a great improvement. I agree with what my noble friend Lord Snape said about the need to make sure that Network Rail stays up to the mark in delivering this high-quality service. I was involved in the Grayrigg train crash, in which a Pendolino came off the track on the way to Carlisle, and I think that any detriment to the safety of the system is a great concern.
	Despite the investment, the situation is still not satisfactory. If noble Lords will bear with me, I shall make some particular points of general relevance. First, you can get to Carlisle very fast, but if you want to go to the heart of Britain's nuclear industry at Sellafield, you face another 40 or 50 miles on a very slow train that rarely connects efficiently with the mainline service at Carlisle. Connections are vital for our area if we are to attract the potentially huge investment from American and French firms that could come to Cumbria if we get the conditions right for a revival of our nuclear power industry. There is a huge opportunity here, but we need to have investment in transport to make it possible. Some of the questions I have for the Minister are, "Do we have the regulatory system right?", and, "Is the franchise system right to encourage the different train operators to work together effectively so that we have a seamless network rather than lots of different services?".
	Secondly, I do not believe that at present transport is serving the needs of sustainable tourism in the future. The Lake District is one of our greatest tourist assets and one of our greatest areas of natural beauty. However, more than 95 per cent of people who come to the Lake District come by car. If we are going to get more sustainability in our tourism, we have to see a modal shift away from the car to public transport. I believe that there is enormous potential for expanding the role of the private sector in providing sustainable transport, but we have to put in place the right regulatory and economic framework. I know that in my county this is not a popular view, but I think we have to question whether free and unrestricted access for private cars to national parks is consistent with a sustainable long-term future. We have to look at different methods of road pricing and congestion charging and at banning cars from particularly sensitive parts of our national parks. There is potential for the kind of electric carbon-neutral buses that the noble Baroness, Lady Scott, spoke about, but we need to have the right economic framework in place for that to happen. Further, if the framework is in place, we can explore the potential for opening up some of our closed railway links like the line into the heart of the Lake District that ran from Penrith to Keswick.
	One of the things I applaud about the present Government's transport policy is their commitment to high-speed rail and investment in a modern, European-style fast rail system. I hope that this is not going to be a victim of the Government's cuts, but I know that the Treasury, which is always suspicious of any sort of rail investment, will try to sharpen its knives. I hope that Ministers in the Government are strong enough to make sure that the high-speed rail links go ahead-and if they do, let me make one special plea. Great Britain does not stop at Birmingham and it certainly does not stop at Manchester; it goes much further north. If we are to have fast trains on the European model in Britain, they have to go to Scotland, and I say that they also have to stop at Carlisle. There is a bit of special pleading for you, but I hope in a good cause. I believe that if we get the economic framework right, we can see a growth in sustainable transport in this country and we can secure a sustainable future for one of the most special parts of England.

Lord Teverson: My Lords, the reason I am taking part in this debate is not because I have been in the transport industry, although I was involved in road freight, but because one of the great things about life in the 20th and 21st century is real freedom of movement. As individuals it allows us to travel more or less where we want, and the freedom of movement of goods means that we can purchase or acquire more or less whatever we want from any part of the world. That is a fantastic privilege. After I left university in 1973, I travelled to eastern Europe, which was not often done in those days. I had an old Morris 1100 and with colleagues we drove around East Germany, Czechoslovakia and Hungary. We came across other students and young people who at the time were not allowed to move out of the communist bloc. They did not have freedom of movement, so it is a great privilege that we can enjoy today.
	The big difference between the 20th and the 21st centuries is, of course, that we have to feel guilty about that freedom of movement because of our carbon footprint and all that is caused by carbon emissions produced through the movement of ourselves or our goods. Something like a quarter of all carbon emissions within the United Kingdom are the result of transport, while beyond that to the global environment, aircraft emissions account for 2 per cent rising to 3 per cent of total emissions. Again, that is something we are concerned about and will have to solve if we are going to have sustainable economies.
	What I really want to do in this debate is agree with the premise of the Motion, which is that through transport we can be sustainable while enjoying those freedoms and creating jobs that will renew our economy, and I want to encourage the Government in that process. I have one or two questions which have not been raised. The Committee on Climate Change looked at a number of things to do with sustainability in transport and came up with a series of questions. It pointed out that over the past few years we have had quite high profile negotiations at the EU level with car manufacturers about bringing down the emissions of the cars we drive. That has been relatively successful. But we have not had a similar hard negotiation with the manufacturers of trucks and vans, so those emissions have not come down on average. Are we going to press the Commission to take on the industry at truck and van level, as we have done with cars, to ensure that emissions come down?
	When I first came into the House four years ago, one of the areas of salvation for sustainability of transport and travel was biofuels, which were going to be the future. We all then had visions of the rainforests in Indonesia and South America being cut down-that we were feeding cars rather than people and that food prices were going to go up-and, all of sudden, it became a dodgy subject to talk about rather than a good one. I think it is time the pendulum started to swing back the other way, partly because it is possible to develop sustainable biofuels, such as biodiesel and ethanol, and I would like to know what progress there has been on the guarantee and certification of sustainability. With biogas we have a fantastic opportunity to ensure that biofuels work properly, and in a big way, for sustainable transport through anaerobic digestion and other techniques that do not necessarily substitute road energy for food. What are the Government's plans in that area?
	The Committee on Climate Change drew attention to the staggering statistic that, by 2020-which is only a decade away, obviously-we can expect to have 2 million electric cars on the roads of Britain. When are we going to start the process of setting up the infrastructure to ensure that charging points are delivered across the nation and we can really start to move into that technology? I do not understand how that is going to happen practically.
	For me, one of the great moments in the coalition Government so far was the announcement in the other place from the Ministry of Justice that we are going to reform prison policy; it is fantastic that we are going to look at prisons in a different way. However, in road transport we have an equal kind of hostage to fortune-road pricing. We all know that the only way we will effectively and economically control cars and their usage is through road pricing. Is it likely that there might be a revolution in this area as well over the next five years?
	I congratulate the Government on moving forward with the good work that the previous Government have done in this area, particularly in relation to the high-speed rail network. I encourage them to reach the goal of substituting rail transport for all internal air transport as quickly as possible. However, I have a difficult tale to tell about my experience over the last weekend when I went to Amsterdam to see my daughter, who is working there. I decided to go by high-speed train to Brussels and then, beyond that, to Amsterdam. It was a great travel experience but it was not a great experience for my wallet; it cost me something like double the amount it would have cost me to fly. Affordability, therefore, provides a real challenge and, while I commend the Government on their job creation through sustainable transport and for maintaining our individual freedoms through sustainable travel-Amsterdam was a fantastic example because people there move about the city by bicycle, trams and walking-I urge them to keep to their targets for sustainable transport through high-speed rail, electrification and a sustainable road network.
	I congratulate the coalition Government. I look forward to the Minister's answers and to progress in the industry and in this area of operations.

Political and Constitutional Reform
	 — 
	Statement

Lord McNally: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Deputy Prime Minister. The Statement is as follows.
	"Mr Speaker, every Member of this House was elected knowing that this Parliament must be unlike any other, that we have a unique duty to restore the trust in our political system that has been tested to its limits in recent times. If anything was clear at the general election, it was that more and more people have realised that our political system is broken and needs to be fixed. They want us to clean up politics; they want to be able to hold us properly to account. So the Government have set out an ambitious programme for political renewal, transferring power away from the Executive to empower Parliament and away from Parliament to empower people.
	That programme includes: introducing a power of recall for MPs who are guilty of serious wrongdoing; tackling the influence of big money as we look again at party funding; taking forward long overdue reform of the other place; implementing the Wright Committee recommendations; taking steps to give people more power to shape parliamentary business; speeding up the implementation of individual voter registration; and increasing transparency in lobbying, including through a statutory register.
	Today I am announcing the details of a number of major elements of the Government's proposals for political reform. First, we are introducing legislation to fix parliamentary terms. The date of the next general election will be 7 May 2015. This is a hugely significant constitutional innovation. It is simply not right that a general election can be called according to a Prime Minister's whims. This Prime Minister will be the first Prime Minister to give up that right.
	I know that when the coalition agreement was published, there was some concern at these proposals. We have listened carefully to those concerns, and I can announce today that we will proceed in a Bill that will be introduced before the Summer Recess. First, traditional powers of no confidence will be put into law, and a vote of no confidence will still require only a simple majority. Secondly, if after that vote of no confidence a Government cannot be formed within 14 days, Parliament will be dissolved and a general election will be held. Let me be clear: these steps will strengthen Parliament's power over the Executive. Thirdly, there will be an additional power for Parliament to vote for an early and immediate dissolution. We have decided that a majority of two-thirds will be needed to carry the vote, as opposed to the 55 per cent first suggested, as is the case in the Scottish Parliament. These changes will make it impossible for any Government to force a dissolution for their own purposes. These proposals should make it absolutely clear to the House that votes of no confidence and votes for early dissolution are entirely separate, and that we are putting in place safeguards against a lame-duck Government being left in limbo if the House passes a vote of no confidence but does not vote for early dissolution.
	I am also announcing today the details of the Government's proposals for a referendum on the alternative vote system and for a review of constituency boundaries to create fewer and more equally sized constituencies, cutting the cost of politics and reducing the number of MPs from the 650 that we have today to a House of 600 MPs.
	Together, these proposals help correct the deep unfairness in the way that we hold elections in this country. Under the current set-up, votes count more in some parts of the country than in others, and millions of people feel that their votes do not count at all. Elections are won and lost in a small minority of seats. We have a fractured democracy where some people's votes count and others' do not, where some people are listened to and others are ignored.
	By equalising the size of constituencies, we ensure that people's votes carry the same weight no matter where they live. Only months ago, the electorate of Islington North stood at 66,472, while 10 miles away, in East Ham, the figure was 87,809. In effect, that means that a person voting in East Ham has a vote that is worth much less than a vote in Islington North. That cannot be right. These imbalances are found right across the United Kingdom.
	Reducing the number of MPs allows us to bring our oversized House of Commons into line with legislatures across the world. The House of Commons is the largest directly elected Chamber in the European Union, and is half as big again as the US House of Representatives. It was never intended that the overall size of the House should keep rising, yet that is precisely the effect of the current legislation-the Parliamentary Constituencies Act 1986. Capping the number of MPs corrects that, and saves money too. Fifty fewer MPs would save £12 million a year on pay, pensions and allowances.
	On the referendum, by giving people a choice over their electoral system, we give that system a new legitimacy. Surely when dissatisfaction with politics is so great, one of our first acts must be to give people their own say over something as fundamental as how they elect their MPs. The question will be simple-asking people whether they want to adopt the alternative vote, yes or no. The precise wording will be tested by the Electoral Commission.
	As for the date of the referendum, in making that decision we have been driven by three key considerations: that all parties fought the general election on an absolute pledge to move fast to fix our political system so we must get on and do that without delay; that it is important to avoid asking people to keep traipsing to the ballot box; and, finally, that in these straitened times we must keep costs as low as possible.
	That is why the Prime Minister and I have decided that the referendum will be held on 5 May 2011, the same day as the elections to the devolved legislatures in Scotland, Wales and Northern Ireland and local elections in England. That will save an estimated £17 million. I know that some honourable Members have concerns over that date, but I believe that people will be able to distinguish between the different issues on which they will be asked to vote on the same day.
	Our Bill will make explicit provision for the boundary commissions to report on more equally sized constituencies for the process to be completed by the end of 2013, allowing enough time for candidates to be selected ahead of the 2015 election, and we will ensure that the boundary commissions have what they need to do that. That means that, in the event of a vote in favour of AV, the 2015 election will be held on the new system, andaccording to new boundaries. Let me be clear: these are complementary changes-the outcome of the referendum is put in place as the new boundaries are put in place.
	The Bill will require the boundary commissions to set new constituencies within 5 per cent of a target quota of registered electors, with just two exceptions: Orkney and Shetland, and the Western Isles, uniquely placed given their locations. We have listened, also, to those who have very large constituencies-so the Bill will provide that no constituency will be larger than the size of the largest one now. We intend that, in the future, boundary reviews will be more frequent to ensure that constituencies continue to meet the requirements we will set out in our Bill.
	I understand that this announcement will raise questions on all sides of this House, for these are profound changes. But let me just say this: yes, there are technical issues that will need to be scrutinised and approached with care as these Bills pass through Parliament. But ensuring that elections are as fair and democratic as possible is a matter of principle above all else. These are big, fundamental reforms we are proposing, but we are all duty bound to respond to public demand for political reform. That is how we restore people's faith in their politics once again. I commend this Statement to the House".
	My Lords, that concludes the Statement.

Baroness Royall of Blaisdon: My Lords, I thank the noble Lord the Deputy Leader for repeating the Statement of the Deputy Prime Minister, and I am grateful to the Government for early sight of the Statement.
	There are some who take the view that this House has no role in these matters, that these are matters for the House of Commons and the House of Commons alone; but I believe that this House is a key part of the politics and the constitution of our country and a vital element of the constitutional checks and balances which are a central feature of the governance of our nation. There are clearly issues in the Statement repeated by the Deputy Leader for this House to consider.
	First, will the Deputy Leader acknowledge that the Government's proposals announced today for an early Dissolution of Parliament following a vote of no confidence represents the first major U-turn of this Government-and in less than two months? Can he explain to the House why the Government did not think before about the impossibility of a Government hanging on after they had lost a vote of no confidence by a simple majority? To have done so would have saved the Government a lot of embarrassment. But why, having recognised that a vote of no confidence leads inexorably to a Dissolution, do the Government continue to assert the nonsense that no confidence and Dissolution are separate? They are not-the one is a consequence of the other. As to the Government's now subsidiary proposal for a two-thirds majority of any other Dissolution, what is its purpose? Is it not completely superfluous? Either the Government are in favour of a fixed-term Parliament, as long as the Government of the day enjoy the confidence of the House, or they are not.
	On boundary changes, is the Deputy Leader aware that what we in the Opposition will not allow is for support for AV to be used as some sort of cover for outrageously partisan proposals in the same Bill to gerrymander the boundaries of the House of Commons by arbitrary changes in the rules for setting boundaries and by an equally arbitrary cut in the number of MPs? There is the huge problem, which the Electoral Commission highlighted in March, of 3.5 million citizens who are eligible to vote but who are not on the register. If the Government's aim is to make the system fairer, why has the Deputy Leader said absolutely nothing about how the Government will ensure that those 3.5 million citizens are included in the Boundary Commission's calculations about the size of the constituencies and how to get them on to the register in time for the review of the boundaries?
	Since the Government claim that they want to empower people, is it the Deputy Leader's intention that local communities should continue to have a right to an independent local Boundary Commission inquiry? If it is, then when he says,
	"we will ensure the Boundary Commissions have what they need",
	to complete this huge task by the end of 2013, what additional resources and staff will it be given?
	As for the referendum on the alternative vote, this House will be well aware that just such a proposal was put forward by this party on these Benches. But does the Deputy Leader recall that during the general election the Deputy Prime Minister told the Independent newspaper that the alternative vote system was a "miserable little compromise" and that he was "not going to settle" for that?

A noble Lord: It's not a U-turn, is it?

Baroness Royall of Blaisdon: Can the Deputy Leader tell the House what changed the Deputy Prime Minister's mind?
	The material points on this for your Lordships' House are principally twofold. First, a matter such as a referendum on voting reform is bound to be a central component of the national debate. Whether the public are as interested in it as the politicians remains to be seen. However, it will be part of the national debate, and this House unquestionably has a part to play in that debate.
	Secondly, a move to a referendum will require primary legislation. Even if you do subscribe to the view that it must be for the elected House to have its way on electoral matters at national level, the fact that legislation will come before your Lordships' House again unquestionably requires this House to play its part in the carriage of that legislation. So, Members of this House will be able to hold the Government to account as they bring forward the legislation which this referendum will require.
	I can tell the Deputy Leader that one of the points on which we will be pressing the Government strenuously will be the clear need to improve the register of voters before any election under a changed system of voting. We know the gaps in the register. We know that people across this country are disenfranchised. We know that those who are particularly disenfranchised are those who are already among the most disadvantaged. So, as part of the preparation for the next general election-and particularly so if it is to be carried out on the basis of a changed method of voting-can the Deputy Leader confirm that the Government will mount with local authorities a major exercise to improve registration?
	Can the Minister also confirm that just as the coalition Government are preparing to press ahead with a referendum on a major constitutional issue such as a change to the electoral system to be used for national general elections, the coalition Government will also commit themselves to a referendum on further major reform of your Lordships' House?
	Much has been made of how far the decision of the coalition Government to proceed to a referendum on AV is a risk to the Prime Minister, the Deputy Prime Minister, the two parties which form the coalition and the coalition Government as a whole. All that, of course, must be a matter for them. However, we on this side of the House are concerned about making sure that the Government's decision to move to a referendum is not a risk to the constitution, to the legislative process and to the country. That is the proper job of opposition. That is a job which, in relation to what the Deputy Prime Minister has announced today, we on this side of this House will do.

Lord McNally: My Lords, on that last point, I would expect no other. Yes, it is the job of the Official Opposition, and indeed of both Houses of Parliament, to scrutinise carefully any constitutional change, and there is nothing in what the noble Baroness said that I could disagree with. Nor would I disagree with the fact that, given the experience and collective wisdom of this House, when the legislation comes forward it should again have proper scrutiny in this House, as it will, as a constitutional Bill, on the Floor of the other place.
	It is always good fun to find U-turns. If you do not U-turn then you are arrogant, you do not listen and you are pushing ahead, but if you consult, listen to advice and make changes then you have done a U-turn. What I look at is the end result, and here the end result is far more sensible and should be far more acceptable to the House than the original proposition. Two-thirds is belt and braces against the Government breaking the fixed Parliament, and as such it should be welcomed. The endorsement of the straight majority being the requisite for a vote of no confidence should, again, be welcome.
	On the question of "outrageously arbitrary", "gerrymandering" and so on, one expects the Opposition to get a little excited and start using colourful and florid language. As most colleagues know, what was wrong with our system was that it was becoming increasingly distorted: in 1951, 98 per cent voted either Labour or Conservative, so the system reflected the view of the country to a general degree, but in 2005, 36 per cent of the vote delivered a majority of 66 per cent in the House of Commons. Giving absolute power on a grotesque minority of the vote is arbitrary and unacceptable, so it is right that we should look at equal constituency sizes. As my right honourable friend pointed out to Mr Straw in the other place, equal constituency size was in fact one of the initial demands of the Chartists in the 1840s, and if it was good enough for the Chartists, it is good enough for me.

Noble Lords: Annual Parliaments!

Lord McNally: The noble Lord, Lord Tomlinson, is showing off his history again.
	These missing 3.5 million citizens are a concern, and it is a concern that many of them can be identified as young people, people from ethnic minorities and the very poor. The reason why they are not registered is a matter that we all have to address, and I fully agree that there has to be more of an effort to get them on to the register. On the other hand, if you have between 92 percent and 93 per cent of your electorate registered, with all the churn that goes on, that is not a bad record for a functioning democracy.
	What is more unacceptable is the idea of holding elections on Boundary Commission boundaries that, by the time the election is held, are over 10 years old. That is how you get your elections out of kilter. However, I take the noble Baroness's point. We will certainly make every effort to get people registered and involved in our political system. One of the good things about this exercise is that nobody has suggested that our Boundary Commission has been anything other than absolutely above reproach in the way in which it has carried out its work, except that it has been extraordinarily slow in doing that work. We will talk with the Electoral Commission and the Boundary Commission to see what resources they need to do a better job quickly.
	Whether or not AV is a "miserable little compromise" is a matter of judgment, but it is interesting that the party opposite opted for AV for the very good reason that it retains the link with the single constituency. I see the noble Lord, Lord Grocott, nodding in agreement. I find one of the refreshing and enlivening things about coalition is that, after you have fought an election with firm vigour, you sit down with your coalition partners and you manage to convince them about a referendum on voting reform, while they manage to convince you that AV would be the best solution to put to the country. That is the kind of healthy give and take-

Lord Davies of Coity: My Lords-

Lord McNally: No, sit down. We have 20 minutes. So eager are the Opposition to start asking me further questions that I will just say that I think that I have covered most of the points that the noble Baroness raised and I look forward to questions from the Back Benches.

Lord Waddington: I wonder whether the noble Lord will allow me to pursue a matter that was raised by the noble Baroness, Lady Royall. I am very much in favour of a reduction in the number of parliamentary seats, but how will the Government ensure that the Boundary Commission can report and bring those changes into effect in time for the next general election? It is not enough just to require the Boundary Commission to report by a certain date; somehow or other, it will have to avoid getting bogged down in interminable local inquiries, which are what have taken up time in the past. What will the Government do to try to curtail those inquiries and to make it possible for the Boundary Commission to report? I am not much in favour of curtailing the rights of citizens to give evidence at inquiries, but what is the alternative? How can the Minister assure me that these changes will come into effect in time for the next general election?

Lord McNally: My noble friend makes a very interesting point, which I suspect that the draft Bill will cover. We have to find the right balance between the Boundary Commission doing a proper and thorough job and not getting bogged down in the way that my noble friend describes.

Baroness Taylor of Bolton: Given the Government's new-found enthusiasm for a two-thirds threshold for a Dissolution of Parliament, will there be a threshold in the referendum? Will two-thirds of the country have to vote yes in the referendum? Will there be a threshold in the turnout of the electorate before the referendum has any validity?

Lord McNally: No. If the noble Baroness wants me to show her the scars, I will tell her about the first Scottish referendum.

Noble Lords: My Lords-

Lord Howe of Aberavon: My Lords, what is most notable about my noble friend's presentation is that in the last paragraph he emphasises that these are profound changes-"big, fundamental reforms" which will require immense and careful scrutiny. Does it begin to make sense for the whole range of solutions to these wide-ranging problems to be presented in this way at this time? Is he aware that the first book I reviewed, for the South Wales Evening Post, was written by Christopher Hollis and had as its title the question Can Parliament Survive?That was 60 years ago. The book was full of anxieties and propositions. Parliament has, on the whole, until the last decade survived pretty well. In the earlier 50 years it would not have dreamt of approaching problems as large as this with solutions as great as this. It would surely have committed them to a Speaker's Conference, a royal commission or both, and done it step by step. To address this situation of total disillusion, as my noble friend describes it, with a torrent of ill considered change of almost everything is surely the last thing people want at this time.

Lord McNally: That speech has been made in this House and the other place many times over the last 200 years, though not by me. I have always taken the view that constitutional reforms are carried through by Governments that believe in them and put them with vigour to both Houses. My noble and learned friend gives the recipe for inaction that we have always had-Speaker's Conferences, royal commissions and inaction. This is a radical programme to deal with a problem that we are all aware of. I was a member of the Maclennan committee before the 1997 election. I remember our high hopes that the incoming Labour Government would move forward. Unfortunately, after three or four years they completely ran out of stem on steam on constitutional reform.

Lord Dholakia: My Lords-

Lord Elystan-Morgan: My Lords-

Lord Strathclyde: My Lords, we have another 15 minutes. I am sure everybody will get in. Shall we hear from the Cross Benches first and then somebody from the Labour Party?

Lord Elystan-Morgan: My Lords, does the Minister recollect that, about a fortnight ago, in reply to my intervention in a Question on the reduction of the number of seats in the House of Commons, he said that the justification for that was devolution in relation to Scotland and Wales? Today's Statement makes no reference to devolution-only to the saving of £12 million per annum. Which is it? Will it be the case, as far as the reduction is concerned, that it will be pro rata over the whole of the United Kingdom, with no specific culling on the basis of devolutio8n for Wales or Scotland?

Lord McNally: There is no specific culling on the basis of Welsh or Scottish devolution. There is an aim, as far as possible, to get the same size of constituency. Saving money and moving forward with devolution are not mutually exclusive. We have already pledged that we will move forward with the referendum on more powers for the Welsh Assembly-something that the Government are committed to and which is part of this broader pattern of political reform.

Lord Dholakia: My Lords-

Lord Campbell-Savours: My Lords-

Lord Strathclyde: My Lords, I said that a Labour Back-Bencher should speak next. Then we will hear from my noble friend Lord Dholakia.

Lord Campbell-Savours: I ask a question that will be on the minds of elected Members of the House of Commons. The noble Lord referred to 5 per cent of the target quota of registered electors. What is that number per constituency on the basis of calculations which have already been done in the Minister's department?

Lord McNally: I think the figure is about 80,000. I am not sure whether I am going beyond my brief in telling the noble Lord that, but it does not take a great deal of high mathematics to work out that 600 into the electorate is about 80,000.

Lord Dholakia: My Lords, from this side of the coalition I thank the noble Lord, Lord McNally, for repeating the Statement on political and constitutional reform. Coming so soon after the reform of the criminal justice system announced last week, this is most welcome and the Government ought to be congratulated on it. Does the Minister accept that the previous election, fought on the first past the post system, did not deliver a strong, stable or decisive Government-so much for that system? Some in government have indicated that they do not wish to play an active role in the referendum campaign. What is being done to encourage them to participate? The referendum and the involvement of political parties will have resource implications. What discussions are being held with the Electoral Commission and others to ensure that funds are available for that campaign? Will the Minister encourage the media to take an active role similar to that adopted in the leadership debates so that the electorate are better informed about the new system being proposed?

Lord McNally: I thank my noble friend for those comments. It is clear that a referendum will involve a yes and a no campaign with a cap on the expenditure on either side but with some public funding available to help both sides. That will become clear following the discussions we are having with the Electoral Commission to ensure that the referendum can be conducted properly and with the involvement that my noble friend talked about.

Noble Lords: My Lords-

Lord Brooke of Alverthorpe: When precisely will the Government speed up registration? What action will they take between now and the referendum, or can we expect 3.5 million people not to vote in the referendum because they are not registered? Will the Minister consider the suggestion made recently to him by his Back-Bench noble friend Lord Goodlad as regards adopting the good and well tried practice in many countries, particularly Australia, where there is compulsory registration of individuals? Are the Government considering that; if not, why not?

Lord McNally: We are not considering compulsory voting. The note of indignation about the missing 3.5 million comes a bit rum from a Government who tolerated it all through their period in office. However, I do not blame them. Suddenly the Labour Party has become indignant about the missing 3.5 million. I believe that in a voluntary system it is almost impossible to get 100 per cent registration. Then there is the problem to which I referred of a low turnout among the very poor, ethnic minorities and the very young. Those problems face all political parties when seeking to engage those groups in our political process.

Lord Pearson of Rannoch: My Lords-

Noble Lords: Cross Benches!

Lord Higgins: We have heard various cost estimates, but not one for the redistribution of the boundaries under the Boundary Commission. What is that cost estimate? I do not share the noble Lord's view on the Boundary Commission. In a public inquiry in my former constituency of Worthing all the political parties and everyone were agreed on what the right answer was. After the matter had been concluded, the Boundary Commission, without warning, came up with a totally different solution. Should there not be an appeals procedure, at least in extreme cases where the answer seems to be wrong?

Lord McNally: We will have to see what the proposals are in the Bill to meet the objective of streamlining the work of the Boundary Commission. I think that any reasonable person would say that is needed if its work is to be relevant to elections. I repeat that a gap of 10 years between the commission doing its work and the holding of an election renders that work absurd. It is very difficult to respond on individual constituency issues and to give at the moment a precise response on costing. All those will come forward in due course and in proper time.

Lord Pearson of Rannoch: My Lords-

Lord Pannick: My Lords-

Lord Strathclyde: My Lords, the noble Lord, Lord Pearson, has been trying to get in from the very start. He is the leader of a party in this House. Perhaps we can then hear from the noble Lord, Lord Pannick.

Lord Pearson of Rannoch: My Lords, I am most grateful. I should like to put a question on behalf of the 2.5 million people who voted for minority parties, the largest of which I have the honour to lead. The Government state:
	"Surely when dissatisfaction with politics is so great, one of our first acts must be to give people their own say over something as fundamental as how they elect their MPs".
	However, the Statement goes on to "take it or leave it". It is the AV system or nothing. What is wrong with AV plus, which is, after all, a system that is good enough for Scotland, Wales and the London Assembly? Why is that system not good enough for the country?

Lord Foulkes of Cumnock: Because it's useless.

Lord McNally: I have just heard a major flaw in AV plus; the noble Lord, Lord Foulkes, was elected to the Scottish Parliament on it. The Government of the day have a duty to put forward a proposal for Parliament to consider a referendum on AV plus-

Noble Lords: Oh!

Lord McNally: I am sorry, I meant AV. It is for Parliament to scrutinise and Parliament will decide.

Lord Pannick: Can the Deputy Leader clarify what is the purpose of legislating to allow for a dissolution of Parliament on a two-thirds vote of the Members of the other place? Her Majesty's Opposition will of course seek to persuade that House, on a 50 per cent vote, to pass a vote of no confidence. This matter was raised by the noble Baroness, Lady Royall, but the noble Lord gave no answer.

Lord McNally: The point is that once we have got to a system of fixed-term Parliaments, to prevent the Government of the day engineering an early dissolution for their own short-term political advantage, they would therefore need a two-thirds majority-something that no Government in the UK have had since the war. As I said in my opening response to the noble Baroness, it is belt and braces against what we are trying to get away from. We are trying to move to the stability of a fixed-term Parliament and away from Governments of the day using early elections for short-term advantage.

Lord Lawson of Blaby: My Lords, given the profundity of the constitutional changes that will be incorporated in this Bill, can my noble friend give an undertaking that in no circumstances would the Parliament Act be invoked in order to secure its passage?

Lord McNally: I do not think that we go into things like that at this stage.

Noble Lords: Oh! Shame!

Lord McNally: We put forward proposals for the very good reason that we think they are very sensible, and we assume that both Houses of Parliament will endorse them.

Lord Davies of Coity: My Lords, with regard to the referendum on the alternative vote, can the Minister answer this simple question? We understand that both parties that make up the coalition Government will campaign in opposite directions. If that is the case, what impact will that have on the electorate?

Lord McNally: I have no idea. However, I am sure that, as with previous referenda, we will have people of good will taking honest opinions about voting yes or no and campaigning on them-and may the best side win.

Lord Rennard: My Lords, is the Minister aware that the estimates that have been made of the party-political consequences of this reducing and equalising measure suggest that it may make a difference of only seven or eight, or 12 or 13, seats; and therefore that much heat has been generated needlessly about this proposal?

Lord McNally: I am quite sure that the psephologists and slide-rule merchants in all parties and on television will be making calculations. We are putting this forward because it makes our system of elections fairer, and that is what people want.

Baroness Symons of Vernham Dean: My Lords, I do not want to be unkind to the Deputy Leader of the House, but his answers seem to have been a combination of, "You would say that, wouldn't you?" to the Opposition, and, "I have heard that argument before" to members of his coalition; and it seems that he cannot say whether the Parliament Act would be used. I will ask a straightforward question: what will happen to the coalition if the referendum on an AV system is lost?

Lord McNally: Usually, people who say that they do not want to be unkind mean that they want to be unkind. I assure the noble Baroness that if the referendum is lost, the coalition will move on with its programme of government towards the election in May 2015. What has not got across to the other side is that we are into a new system of politics that provides better governance.

Lord Goodlad: My Lords, will my noble friend arrange for an early debate on the Select Committee on the Constitution's recent report on referendums, in the light of the difference of views that have been expressed around the House and of the topicality of the subject?

Lord McNally: That is a matter for the usual channels.

Lord Myners: The Minister explained the reduction in the size of the other place by reference to the size of Chambers elsewhere in the world, and to cost. Will he explain why the Government are increasing the membership of this House?

Lord McNally: It is a period of transition-I nearly said "ambition". Once the radical reforms for this place are through, this House, too, will come down in size.

Lord Strathclyde: My Lords, I know that this subject interests all parts of the House, but we have now spent 20 minutes on it. Normally, we would go on to the next Statement, which is on education. However, since it has not yet started in another place, we will continue with the debate. The noble Lord, Lord Greenway, is the next person on the list of speakers. It has been drawn to my attention that he has now arrived, which is very good news for the whole House and no doubt for the nation, which will be waiting to hear what he has to say.

Transport
	 — 
	Motion to Take Note (Continued)

Lord Greenway: My Lords, I am grateful to the Leader of the House and apologise for being caught completely unawares. I am rather breathless but I am here.
	We now return to the general transport debate, so ably introduced by the noble Earl, Lord Attlee, whose competence in many transport matters we have got used to over the years. I join other noble Lords in welcoming him to his new post.
	So far we have talked about rail and roads, and no doubt we will talk more about those subjects, but I am now going to take your Lordships away for a breath of sea air and talk for a bit about the maritime side of the transport business.
	We are an island nation and have always relied on trade for our well-being. Indeed, it was on the back of trade that our present greatness was built, and for many many years we were without equal in both shipping and shipbuilding. We are still an island and trade is still vital to our economy, with over 90 per cent of it involving a sea journey.
	The introduction of the tonnage tax by the then Deputy Prime Minister in 1998 reversed a serious decline of the UK fleet, since when it has made a considerable recovery, increasing some sixfold. A number of big foreign companies have set up large UK operations and have placed quite a large number of ships on the UK register.
	The recent recession hit shipping hard. The volumes coming out of Asia are starting to improve and rates are holding up, giving some cause for optimism, although I am sure that there could, and probably will, be further fluctuations before we return to the boom conditions that existed before the credit crunch.
	However, this sense of optimism is under severe threat so far as the UK flag is concerned, as a very nasty squall is approaching over the horizon. Some of your Lordships may have seen a letter in the Daily Telegraph last Friday and an article by Libby Purves in the Times today. The letter in the Daily Telegraph was signed by 11 senior shipping executives in this country. The reason for their concern is an obscure regulation tucked away in the Equality Act, which was rushed through just before the election. I believe that it is coming up for implementation in October and, if brought in, it could compel quite a large number of UK flagship operators to leave the UK register, as it would compel them to pay UK wage levels to seafarers who are normally resident abroad.
	For many years, those people have been paid lower wages than their UK counterparts but ones that nevertheless place them on a par with highly skilled professionals in their own countries. The arrangement goes back to the Race Relations Act 1976, from which shipping was granted an exemption. It was reviewed in 2003 when the amount of damage that it would do to the industry was realised. This new threat is indeed very severe, and quite a large number of owners-possibly up to 20-have indicated that, if the regulation is brought in, they will almost definitely remove their ships to another flag. As many as 172 ships-almost 50 per cent of the current UK fleet-could be affected. If the new rates apply only to ships within the European economic area, a smaller number of ships will be affected but it will still have a massive impact on UK Ltd's shipping. Extra costs would arise out of it and could well impact on the jobs of 4,000 seafarers.
	I hope that the Government will look at this matter extremely seriously. It would affect not only shipping but all the ancillary businesses in the City that rely on shipping and are still recognised as world leaders. I am talking of insurance, arbitration and shipping law. Many foreigners still prefer to use shipping law, so London must not lose its attraction. Many other places in the world, including Singapore and Dubai, are trying to increase their shipping centres, and anything that happens to damage our shipping will only benefit these new centres.
	Yet another squall is coming over the horizon involving taxing non-domiciles, which I believe the Government are taking a further look at. Let me give an example of what can happen. Some years ago New York was a maritime centre to rival London, with many non-domiciled Greeks living and working there. The Americans decided to tax the worldwide interests of the non-doms, which resulted in all the Greeks upping sticks and leaving New York. They have never returned. We cannot allow that to happen here. A lot of Greek non-domiciled shipping people have been resident here for many years but a number have already gone back to Athens. If any further detrimental change is made to the tax regime for non-doms, UK shipping would suffer a very great loss. It does not just affect immediate owners. Greek shipping businesses are very complex; there are a lot of family trusts, so not only the up-front people are affected but many of the families as well.
	The Government must take strong note of two factors. We must preserve a decent UK-flagged fleet because on that hangs all our expertise in the City of London. That was why the International Maritime Organisation was based in London in the first place.
	I shall say a few words about safety, which is part of today's debate. One of the worrying things about shipping is manning levels. Shipping companies have been far too ready to cut their staff, which must have a detrimental effect. There are numerous instances of fatigue causing accidents. I believe that some measures are being taken to try to rectify that, but when so much capital is tied up in a ship and its cargo one must ensure that that ship is properly navigated and looked after. That issue needs to be looked at again. It is all very well relying on modern electronics but one cannot beat an extra pair of eyes on the bridge of a ship.
	There is also concern about the dissemination of information within the industry. There was an incident this year when a container stack on a feeder ship collapsed. The investigation discovered that an almost identical accident had happened on a similar ship four years ago. The Marine Accident Investigation Branch had reported thoroughly on that accident but it appears that that knowledge had simply not reached the operators of the ship that was affected this year. That cannot be right and we must try to improve the dissemination of important safety information.
	Another worrying issue regarding the international transportation of containers is the fact that there is no proper way of checking the weight of a container before it is loaded on board a ship. The shipowner has to take what the transporter of the goods says, and again in recent incidents when container stacks have collapsed, their weight bore no relation to the figures provided to the shipping company.
	The enormous expansion in the number of wind farms, as mentioned in the first Question today, is also a safety concern for the shipping industry. In the earlier rounds of granting licences to developers of offshore wind farms, no one seemed to take shipping into consideration. It was intended to place some of them right across well used shipping lanes, which was obviously crazy. Things have since improved and developers now consult widely with the general lighthouse authorities. Inevitably, however, with the enormous increase in wind turbines offshore, we will increase the risk of an accident. If a gas carrier or large tanker is involved, one can only guess at the horrors that might arise.
	I want to comment briefly on ports, which are the important interfaces between the shipping industry, shipping transport and inland transport. I am delighted that the Government have acted quickly to reverse the back-dated rates, which were affecting a large number of ports and people who operate within them. The system was quite iniquitous and I am delighted that they have taken that action. However, a few companies have gone bust as a result. What will happen about them? I fear that nothing will.
	A number of new port developments have been given the go-ahead. Work is actually starting on the London Gateway, on the site of the old oil refinery just this side of Southend. It is an extremely large and important development, and with improvements in shipping and overall trade we will need such facilities when shipping gets back into its stride.
	I could go on to talk about all sorts of different subjects, but I will not. I shall merely return to the fact that shipping is so important to this country that the Government must take note of the two issues I mentioned earlier. If we lose our UK flag, the whole of the back-up of maritime businesses could topple like a pack of cards. That is something that we cannot allow.

Education: Funding
	 — 
	Statement

Lord Hill of Oareford: My Lords, first, I apologise for interrupting the debate again. With permission, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Education. The Statement is as follows:
	"Mr Speaker, with your permission, I would like to make a Statement on education funding. This coalition Government are determined to make opportunity more equal and to reverse the decline in the performance of our education system relative to our international competitors.
	Over the last 10 years, we have declined from fourth in the world for the quality of science education to 14th; from seventh in the world for literacy to 17th; and from eighth in the world for mathematics to 24th. At the same time, the gulf between rich and poor has got wider, with the attainment gap between students in fee-paying schools and those in state schools doubling. But the action necessary to improve our schools is made more difficult by the truly appalling state of the public finances left by the last Government.
	This coalition has inherited a national debt approaching £1 trillion; a budget deficit of £150 billion; and debt interest costs every year which are more than the entire schools budget. It is no surprise then that the last Labour Chancellor of the Exchequer felt he had to pledge a 50 per cent cut in all capital spending, the last Labour Education Secretary could not make any firm promises to protect schools' capital spending and the last Labour Chief Secretary to the Treasury left a letter saying simply that there is no money left.
	Faced with the desperate mess left by the last Administration, this Government have had to prioritise, and our first priority is raising the attainment of the poorest by investing in great teaching. We know that the world's best education systems have the most highly qualified teachers. We are fortunate that the current generation of teachers is the best ever, but we must do better if we are to keep pace with the best.
	No organisation has done more to attract brilliant new recruits into the classroom than the charity Teach First. Since its launch, Teach First has placed hundreds of highly accomplished graduates in our most challenging schools and has helped drive up attainment in those schools for the very poorest.
	We believe that every child should have access to excellence, especially the poorest, which is why we will more than double the size of the programme from 560 new teachers a year to 1,140. We will help to recruit hundreds more teachers into areas of poverty, so there will be Teach First teachers in one-third of all challenging schools. Breaking new ground, we will fund the permanent expansion of Teach First into primary schools, so that more than 300 superb new teachers will be working in some of the country's most challenging primaries.
	Therefore, to clear up the economic mess that we have been left, we have to bear down on the waste and bureaucracy which have characterised Labour's years in office and reined back projects which have not been properly funded. Even before we formed this coalition Government and had the opportunity to look properly at the scandalous mess that we inherited, we knew that Labour Ministers had no proper respect for the public's money.
	The whole process by which the Government procured new school buildings was a case in point. The Building Schools for the Future scheme has been responsible for about one-third of all the department's capital spending, but throughout its life, it has been characterised by massive overspends, tragic delays, botched construction projects and needless bureaucracy.
	The BSF process has had nine meta-stages: preparation for BSF, project initiation, strategic planning, business case development, procurement planning, procurement, contractual close, construction and then operation. Each of those meta-stages has a series of sub-stages. Meta-stage 3, strategic planning, for example, has had another nine sub-stages: step 1, local authorities produce a strategic overview of the education strategy; step 2, local authorities produce a school and FE estate summary; step 3, local authorities submit their plans to both the non-departmental public body, Partnership for Schools, and the Department for Education for approval; step 4, once Ministers have approved steps 2 and 3, part 1 of the Strategy for Change is considered complete; step 5, local authorities produce another strategic overview, this time with "detail and delivery"; step 6, local authorities use the school and FE estate summary to develop an estates strategy; step 7, local authorities then seek executive approval on steps 5 and 6; step 8, once they get executive approval, local authorities submit the same documents to the Department for Education; step 9, once the Department for Education approves, part 2 of the Strategy for Change is complete.
	I have here just the first three of the more than 60 official documents which anyone negotiating the BSF process needed to navigate. The whole process has been presided over by the Department for Education, the quango, Partnership for Schools, and at various times has involved another body, 4ps, and Partnership UK.
	Local authorities involved in this process have employed a Partnership for Schools director, a Department for Education project adviser, a 4ps adviser and an enabler from CABE, the Council for Architecture and the Built Environment-another non-departmental public body. Local authorities have also had to set up a project governance and delivery structure, normally including a project board of 10 people, a separate project team of another 10 people and a further, separate, stakeholder board of 20 people. They formed the core group supervising the project. Beyond them, local authorities were expected to engage a design champion, a client design adviser and the 4ps gateway review team-a group of people who produce six separate gateway reviews over the course of the whole project.
	It is perhaps no surprise that it can take almost three years to negotiate the bureaucratic process of BSF before a single builder is engaged or brick is laid. Some councils which entered the process six years ago have only just started building new schools. Another project starting this year is three years behind schedule.
	By contrast, Hong Kong International Airport, which was built on a barren rock in the South China Sea and can process 50 million passenger movements every year took just six years to build-from start to finish.
	Given the massively flawed way in which it was designed and led, BSF failed to meet any of its targets. BSF schools cost three times what it costs to procure buildings in the commercial world, and twice what it costs to build a school in Ireland. The previous Government were supposed to have built 200 wholly new schools by the end of 2008. They had rebuilt only 35 and refurbished 13. The cost to each school for just participating in the early stages of the programme was equivalent to the cost of a whole newly qualified teacher. The cost of setting up the procurement bureaucracy before building could commence-the so-called local education partnership or LEP-has been up to £10 million for each local area.
	This expenditure did not guarantee quality. One BSF school was built with corridors so narrow that the whole building had to be reconstructed; another had to be closed because the doors could not cope with high winds; and one was so badly ventilated that additional mobile air conditioners had to be brought in during the summer and pupils were sent home.
	After 13 years in power, only 96 new schools out of a total secondary school estate of 3,500 schools have ever been built under BSF. The dilapidated school estate we have today is, alongside our broken public finances, Labour's real legacy. Far from using the boom years to build a new Jerusalem, the previous Government managed to fix only just under 3 per cent of roofs while the sun was shining.
	The whole way we build schools needs radical reform to ensure more money is not wasted on pointless bureaucracy, to ensure buildings are built on budget and on time, and to ensure that a higher proportion of the capital investment we have gets rapidly to the front line: to individual local authorities and schools which need it most. That is why I can announce today that a capital review team, led by John Hood, the former vice-chancellor of the University of Oxford, Sir John Egan, the former chief executive of BAA and Jaguar, Sebastian James, the group operations director of Dixons Store Group, Kevin Grace, Tesco's director of property services, and Barry Quirk, chief executive of Lewisham Council, will look at every area of departmental capital spending to ensure we can drive down costs, get buildings more quickly and have a higher proportion of money going direct to the front line.
	In order to ensure we do not waste any more money on a dysfunctional process, I am today taking action to get the best possible value for the taxpayer. I will take account of the contractual commitments already entered into, but I cannot allow more money to be spent until we have ensured a more efficient use of resources. Where financial close has been reached in a local education partnership, the projects agreed under that LEP will go ahead. I will continue to look at the scope for savings in all these projects. Where financial close has not been reached, future projects procured under BSF will not go ahead. This decision will not affect the other capital funding in those areas. Schools will still receive their devolved capital allowance for necessary repairs, and the efficiencies we make now will ensure better targeting of future commitments on areas of greatest need.
	However, there are some areas where, although financial close has not been reached, very significant work has been undertaken to the point of appointing a preferred bidder at close of dialogue. There are 14 such cases. In these cases, two, or occasionally, three projects have been prioritised locally as sample projects to be the first taken forward in the area. I will be looking in more detail over coming weeks at these sample projects to see whether any should be allowed to proceed.
	Because we believe in supporting those in greatest need, my department will be talking to the sponsors of the 100 or so academy projects in the pipeline with funding agreements or which are due to open in the coming academic year which are designed to serve students in challenging schools in our most deprived areas. Where academies are meeting a demand for significant new places and building work is essential to meet that demand, where there is a merger and use of existing buildings would cause educational problems and where there is other pressing need, I will look sympathetically on the need for building work to go ahead, but where projects are some way from opening or academy sponsors can use existing buildings to continue their work of educational transformation any future capital commitments will have to wait until the conclusion of our review. That review is made all the more necessary because as pupil numbers rise in years to come we have to ensure our first duty is guaranteeing an expansion in capacity to meet that demographic growth.
	Fortunately, in this coalition Government, we have a proper relationship between the Department for Education and the Treasury, which is why we have deliberately reduced our forecast reliance on underspends elsewhere and brought our spending into line. In the process, we have kept capital spending within the envelope outlined by the last Government so there are no reductions beyond those which the Treasury had budgeted for. By bearing down on costs now, we can ensure that money will be available in the future to help secure additional places, to help the most disadvantaged pupils, and to refurbish those schools in greatest need.
	We have safeguarded front-line schools spending, front-line spending on Sure Start, and front-line spending on school and college places for 16 to 19 year-olds this year. We have cut spending on wasteful quangos, we have cut the unnecessary bureaucracy that has swallowed up so much money, and we have reduced the amount spent on regional government, on field forces, and on unnecessary government inspection regimes. But we have prioritised funding for better teachers, we have invested more in the education of the poorest, and we are giving schools greater control of the money which had previously been spent on their behalf. For everyone who believes in reforming education, that has to be the right choice, and I commend this Statement to the House".
	My Lords, that concludes the Statement.

Baroness Morgan of Drefelin: My Lords, I thank the Minister for repeating the Statement in this House. I do not want to trade on legacies, but I have to make it clear for the record that even the right honourable Michael Gove, Secretary of State for Education, has recognised and admitted, albeit rather grudgingly, that in 1997 we inherited a legacy of tremendous underinvestment in the school estate and that it was absolutely right to prioritise investment in school facilities. Labour's investment in school building initially targeted the backlog of repairs that had built up under the last Conservative Government as well as helping to provide for smaller classes in the primary sector. Since 1997, around 4,000 schools have been built new, rebuilt or significantly refurbished, with 1,000 completed in the last two years. Labour was on track to see a further 1,000 new school buildings in the next two years. Overall, every school has benefited from investment projects, big or small, and devolved programmes did put investment directly into the hands of every single school in every single part of the country.
	Building Schools for the Future refocused schools investment on the strategic renewal of the school estate. It was intended to be a programme to renew the entire secondary estate and to plan and provide for changes in demand. The National Audit Office looked at Building Schools for the Future and found that, yes, it was delivering rebuild and redevelopment in a very successful way. So I have to say that this Statement is disastrous news for hundreds of thousands of teachers, parents and pupils who had been expecting this much-needed investment in decent, 21st century facilities for children to learn in. Even though we warned during the election campaign that hundreds of school rebuilding projects would face the Tory axe, I believe that this news will still be a bitter blow for communities right across the country, from Devon all the way to Denbighshire.
	This is an extremely short-sighted decision by the coalition Government. Billions of pounds' worth of contracts that support thousands of jobs and local businesses will now be lost. Further, many schools and councils have spent a great deal of time as well as investing money and resources into working up their rebuilding plans, only to find the rug pulled from under their feet. As I said, Building Schools for the Future was also designed to plan for future changes in school numbers. The right honourable Michael Gove has said that his priority for the spending review is a hugely expensive free market schools policy that will see new schools built with no regard for the need for places in an area. Instead, it will create a free-for-all which has been shown elsewhere to be much more expensive.
	I have a number of questions for the Minister. The Statement began by talking about standards. Can he confirm that, in 1997, half of all schools missed the basic performance level of 30 per cent good GCSEs that we set and which has been cut to just one in 12 schools? Can he confirm that improvement in standards since 1997? Further, can he confirm that in the international TIMSS study, England has risen from 25th in the world in 1995 to seventh place, and that England's 10 and 14 year-olds are the highest achieving pupils overall in maths and science among European countries? Can he dispel the notion that it is the Government's policy to run down the achievements of teachers and children around this country at every opportunity? I would like to hear him say how proud he is of the achievements and our children around the country.
	On the question of Teach First, does the Minister agree that we have the best generation of teachers we have ever had in this country? Is he proud of the contribution that teachers make? Can he confirm that the previous Government had already invested in expanding Teach First, including pilots for primary schools? Can he make the House aware that it was the leadership of the Teach First programme who warned the previous Government that to accelerate its expansion any faster would put at risk the future quality of the programme? So it was the previous Government who were thinking carefully about the quality of the programme.
	Can the Minister be clear about what independent assessment has been made about the Building Schools for the Futureprogramme that has led to this huge cut to valuable developments around the country? Have the Government made any assessment of the numbers of construction and private sector jobs that will be lost as a result of the decision? What will be the impact of the decision on jobs? Do the Government believe that excellent facilities are key to an excellent learning environment? What is the Government's policy on that? Will the schools that have been planning for building still have a building programme under this new value for money scheme, or does it simply represent an overall cut in the development of our school infrastructure?
	Where will the capital come from for the free school programme? I really want an answer to that because I have asked the question a few times already. Will the projects be capitally funded from money saved from the cut in the Building Schools for the Future programme? Exactly how much will be saved by this announcement today? What will be lost through the cost of break clauses and reorganising expenditure? What methods will the Government use to fund and support councils to plan for future changes in demand for schools, or will they simply expect them to provide more portacabins as the rolls increase? Will schools and councils be left to pick up the tab for the work they have done already to prepare for the new investment?
	Finally, have the Government made an independent assessment of the value for money of the free schools policy? As the Minister is aware, I am interested to know about that impact assessment because evidence from Sweden has shown some disappointing results.
	I am aware that I have asked a number of questions and I am grateful for the Minister's attention. If there are any points of detail on which he would wish to write to me, I should be happy to receive such a letter. I am grateful to the noble Lord for repeating the Statement.

Lord Hill of Oareford: My Lords, if there are points of detail I shall write. However, let me respond in broad terms, first, to the points made by the noble Baroness, Lady Morgan.
	Going back to 1997 generally, I hope I have always made it clear to the noble Baroness and other noble Lords on the Benches opposite that there are many things that the previous Labour Government did well in the field of education that we want to build on. As she rightly pointed out, one of those was Teach First, and I am happy to put on the record again my praise for the previous Government in setting up that scheme. I agree with her that this is the best generation of teachers that we have had. I recognise that that does not happen by accident and the efforts of the previous Government contributed to it I certainly want to dispel the notion that, in talking about Building Schools for the Future, one in any way wants to run down or disparage the achievement of teachers or pupils. That is not our purpose. If the noble Baroness were to be fair to me, she would recognise that, since I have started doing this job, I have sought frequently to praise teachers where praise is due.
	Neither this Government nor any Government would want willingly to cause the difficulty and disappointment for schools that the noble Baroness rightly said would be caused by this step. It is being done because it has to be done. The NAO report pointed out that the costs of delivering the project appear to have increased by between 16 per cent and 23 per cent from when it was set up. Quite a lot of the evidence has been heard about the bureaucratic nature of the process from people who have involved in it. If one thinks that this is a very expensive way of spending capital and improving schools, one is under an obligation to try to find a cheaper way of doing it. To spend capital willy-nilly when one knows that there is a cheaper way of doing it, when we have all the other financial pressures that we face and when we are asking people to bear a heavier tax burden seems not a sensible or fair way to proceed. Therefore, I do not make this announcement with a light heart, and I recognise the noble Baroness's point about the difficulty that it will cause, but we have taken the decision in order to try to get better value for every pound that we spend on capital and to make sure that, if capital is spent more effectively, we are able to help schools better.
	The noble Baroness has asked me on a previous occasion about funding for the new free schools. The money for that is not coming from any savings from Building Schools for the Future because the previous announcement predated this one. The money for that, which I believe is in the order of £50 million for the first year, is coming from savings from an existing technology fund.
	The noble Baroness asked how much will be saved. By stopping the expenditure now, we think that we can save £5 billion over the lifetime of the spending review period. That £5 billion would have been spent if we had just carried on.
	I hope that I have responded to the noble Baroness's general points; I shall follow up on any specific points. The purpose of setting up the independent review is to learn lessons from Building Schools for the Future and come up with a better, quicker and cheaper system of capital allocation which I am sure everyone would welcome. That money would then go to the schools that needed it most.

Baroness Walmsley: I thank my noble friend for repeating the Statement. I should like to ask him first about Teach First. He will be aware that, under Labour, many schools in deprived areas did not have properly qualified teachers in the STEM subjects, which include science, technology and engineering. Can he say anything about the distribution of the new teachers in Teach First, some of whom will by their nature have qualifications in those subjects? Will he prioritise those schools in deprived areas that have suffered from the lack of properly qualified teachers in those subjects? Can he say something about the resources available for training these new recruits to the teaching profession, who will know all about their own subject but will not know too much about teaching in the first instance? I am aware that they have a foreshortened programme of teacher training, but there will be a lot more of them and we need to be reassured that appropriate funding is available to do that training.
	On Building Schools for the Future, the Minister has made it clear how much it has cost schools and local authorities already to become involved in this overbureaucratic process. When the coalition Government have brought this country's economic situation under control, will those schools that have already spent a lot of money and time, but have suffered from the freeze that he has just announced, be at the front of the queue when we are able to get back to normal business?
	Finally, when talking about quangos, will Partnerships for Schools be closed down?

Lord Hill of Oareford: The role of Partnership for Schools will be considered as part of the review that we have announced. We plan to roll out Teach First to areas of the country that it has previously not reached and go to primary schools, which I am sure my noble friend will particularly welcome given her interest in the teaching of young children. I take her point about the importance of training for STEM subjects, for which there is a particular problem in finding teachers. I know that the previous Government worked hard on that. It is a problem faced by all Governments and I hope that Teach First will help.
	As for whether the disappointed schools that were a long way down in the process would be first in the queue, the answer to all those questions is inevitably dependent on the comprehensive spending review in the autumn and how much capital the department ends up with. It would be wrong of me to presume on the outcome of that, but those are factors that the department will take into account when making future capital allocations.

Baroness Farrington of Ribbleton: My Lords, in repeating the Statement, the Minister said:
	"Where academies are meeting a demand for significant new places and building work is essential to meet that demand, where there is a merger and use of existing buildings would cause educational problems and where there is other pressing need",
	the department will look sympathetically on the need for that work to go ahead. Will he give a categorical assurance that all other schools in the voluntary and maintained sectors will be treated in exactly the same way? Can we have an assurance that after the review, the £5 billion to which the Minister referred, that everyone agrees needs to be spent on our schools, will be returned? There will not be £5 billion of savings after the review unless the money is gone.

Lord Hill of Oareford: On the noble Baroness's first point, the Secretary of State said what he did about academies because the kind of schools that are in the academies programme from the previous Government, which we want to try to continue to support, are by definition focused in the areas of greatest need and deprivation. In looking at those, he will not give any blanket position but will review them on a case-by-case basis to consider as fairly as he can those individual circumstances.
	On funding more generally, I suspect that those are decisions that will be taken by the Treasury, so I doubt that I can give any sensible undertaking at all.

Lord Low of Dalston: My Lords, after the Minister's excoriation of the bureaucracy surrounding the Building Schools for the Future programme, I cannot help observing that the Government appear to have commissioned five people to undertake an independent review of school building. Be that as it may, I welcome the initiative to extend the Teach First programme. Another area where the previous Government took a valuable initiative was in the development of educational leadership. What are the coalition Government's plans for the future of the National College for the Leadership of Schools and Children's Services?

Lord Hill of Oareford: On the first point, five does not seem to be a completely outrageous number. In the composition of the review membership, we have a fairly broad spectrum of people with a range of perspectives which we hope will help us to find cheaper ways of delivering capital. On the second point, I know that my right honourable friend the Secretary of State has spoken recently at the national college and I think that he is positive about the work that it does. As I have already said again today, I agree with the noble Lord, Lord Low, about the work of the previous Government in encouraging national leaders. That was a successful programme on which there is much one would want to build.

Baroness Perry of Southwark: My Lords, I thank my noble friend for reading the Statement and for the sensitive and considerate way in which he expressed his feelings of a heavy heart with having to bring some curtailment to the BSF programme. While sharing his disappointment at the inability to continue the full programme, I should remind noble Lords that many of us felt extreme disappointment at the way in which the BSF programme was dragged out for many urgent cases. Exciting plans were bogged down in bureaucracy and the length of time that it took the department to respond. As my noble friend described, there were many stages, any one of which could make the whole thing fall and thus mean having to start again from the beginning. It was very distressing for many local authorities and schools to have to drag through that process, and to miss out on the plans which they had made.
	Undoubtedly, many good projects are left. They may not necessarily be for new schools, which may have to be put on hold, but for refurbishment of some remaining very dilapidated buildings. Are there any ways in which the coalition Government can put pressure on local authorities to honour some of the more extreme cases of dilapidation and to spend such money as they have in their budgets to help those schools which really need help now?

Lord Hill of Oareford: I am grateful to my noble friend and I will reflect on her last point. In order to make it clear, as regards BSF and the first point made by the noble Baroness, Lady Morgan, on investment and what the previous Government did from 1997, I do not doubt for one moment the good intentions of that programme and what they set out to do. The trouble is that along the way, the programme became encrusted with processes that slowed things down, pushed up the costs and forced out some good things. Coming out of this review, I hope that we will get a better process that will help us to do better by our schools.

Lord Radice: My Lords, I thank the Minister for repeating the Statement made in the other House. We will, of course, want to look carefully at what has been said.
	I just comment that there has been a certain difference between the actual Statement that the Minister read out and the way that he dealt in a rather emollient and sensible way with the interjections from all over the House. I much preferred his way of doing it to the extremely partisan Statement made in the lower House that completely ignored the fact that the previous Government built or refurbished 4,000 schools-the biggest infrastructure programme in education that has been seen in our lifetime.

Lord Hill of Oareford: I am grateful to the noble Lord. I am fast learning the difference between another place and this House, and I consider myself fortunate to be in this place.

Baroness Howe of Idlicote: My Lords, the Minister was right to praise the previous Government for a lot of the things that went on regarding education. Equally, though, I fear that the Statement in both Houses underlines some considerable mistakes that have been made and the wasteful way in which resources have been used.
	Given all our concerns about special needs and schools in deprived areas, not least with the Academies Bill going through, I am thinking about the school buildings that are going to be left half-done, as it were. There is this attractive and clearly well qualified group of five people set up to look at some of these areas. Will the Minister assure us that they will be looking at both deprived areas and deprived needs as one of the major priorities for spending any money that they can find, and that they will move faster?

Lord Hill of Oareford: My Lords, I will ensure that the terms of reference for the independent review are available. If they have not already been placed in the Library, they should be. I take the noble Baroness's point that it is precisely on those who need help most that one ought to be concentrating such capital as we have.

Baroness McIntosh of Hudnall: My Lords, in his brief time in this House, the Minister has earned the respect of the whole House for the way in which he has discharged his duties so far. I sympathise with him for having had to repeat what was really a pretty shameless bit of grandstanding on the part of his right honourable friend in another place.
	However, my question now is concerned with the leadership issue that was raised by the noble Lord, Lord Low of Dalston. Without any question, we are facing difficult times-they are going to be hard, whichever way the cake is carved up-and the people who are going to have to be fully committed and thoroughly supported as we go into this next period are teachers. Rather than just suggesting that his right honourable friend should perhaps not think too badly of the National College for Leadership, will the Minister tell the House that there will be significant resources available not only to train teachers to come into the profession but to reinforce and reskill the teachers already in it, who will need to be at the top of their bent as we go into the next decade?

Lord Hill of Oareford: I am grateful to the noble Baroness. Forgive me for my previous answer to the noble Lord, Lord Low. I was not being evasive; I did not know the precise nature of the commitment that we had given. If the noble Baroness will permit me, perhaps I can contact her and the noble Lord after today and, I hope, give a more precise answer to her question.

Lord Sutherland of Houndwood: My Lords, there is support around the House for the emphasis laid, both in this House and in the other place, on the importance of the quality of teachers and teaching. We all support that warmly. I also associate myself with the positive comments about the initiative made on Teach First and the way in which new recruits to the profession have been brought in. Teach First is one of those initiatives that have been successful. The question that is not often asked is what it has to teach us for the continuing professional development of teachers already in post and for the future development of patterns of recruitment and training of teachers more widely in the system. Will someone be charged with asking those questions and bringing back an answer to the wider community?

Lord Hill of Oareford: In the light of those comments, I will charge myself with asking those questions, as I think that the noble Lord makes a fair point. Given that what he mentions seems to be so successful, there must be points from it that have a wider application. We should make sure that we learn from them.

Baroness Farrington of Ribbleton: If the House will forgive me, I will ask another question, as no one else wants to come in. In response to my earlier question, the Minister referred to the fact-and it is a fact-that the academies are concentrated in areas of deprivation. I asked him about equal treatment for schools in general. Will he give a categorical assurance that other schools in similarly deprived areas will have exactly the same criteria for new projects as the academies will have?

Lord Hill of Oareford: I understand the question and, although I do not want to go too much into the gory detail, I will say that there are two criteria. There is a point in the process of BSF called "financial close", which the Government are taking for the cut-off. It applies to maintained schools and academies. In addition, because academies are in areas of greatest need and deprivation, the Secretary of State will look on a case-by-case basis at whether any of them merit funding, either because a merger is in process or because new buildings are being built, without which children would have nowhere to go to school.

Transport
	 — 
	Motion to Take Note (Continued)

Lord Dykes: My Lords, I am glad to follow the noble Lord, Lord Greenway, but I hope that he will forgive me if, through inexperience and lack of knowledge, I do not adhere to his maritime theme, which was extremely interesting, but return to some of the more general themes enunciated in the debate. I make the brief reflection that this appears to have been a rather unusual and bizarre procedure: the distinguished Peer, the noble Lord, Lord Greenway, made a speech after the first Statement, after which we immediately had a second ministerial Statement. I do not think that I have experienced that before. For the convenience of the House-I hasten to add that I am not stressing my personal convenience-it might have been better if the second Statement had started at about 6 o'clock, rather than 5 o'clock, so that we could have had a substantial additional portion of the transport debate before the Statement. The decision was reached through the usual channels, I suppose, but perhaps Ministers could reflect that their personal convenience should take second place to the general convenience of Members of the House.
	A number of anxieties have been expressed in speeches in the transport debate about what will happen with the capital cuts programme in the department. One of the inevitably sad reflections is that, as the Independent said today, the overwhelming bulk of the department's expenditure is for the Highways Agency, which maintains major roads with a budget of £6.5 billion. There will be no cuts in road repairs, which is probably a good thing, but work on congestion and on providing information will suffer.
	There will presumably be quite serious cuts in railway infrastructure expenditure just at this crucial time when one needs additional spending, particularly in the freight sector-I see the noble Lord, Lord Berkeley, who is a great expert on this subject, in his place-so there will be quite a few anxieties. This is definitely not a personal observation of a distinguished politician in the other House, but the former shadow Chief Secretary to the Treasury is now the Secretary of State and so will quickly have to shed his culture of preparing the axe. He had assumed that he would be a Minister if the Tories won either on their own or in coalition but now has to change his tune and say that capital investment in transport projects is a good way of helping the private sector, as he did in his recent interview in the Financial Times.
	Incidentally, I hope that means that it is a very good thing for the private sector and the public sector. I remain sceptical about the notion of bashing down the public sector-which has a stronger multiplier effect in respect of capital outlays on jobs, employment creation and general economic growth than any other sector, as figures certainly show-and relying entirely on the private sector to make the difference. That is a distinctly old-fashioned theory from pre-war days, which remains to be tested. Be that as it may, these are early days and even coalitions are known to learn from experience. This is an unusual coalition for us, and it is the first post-war one. We all hope that it will be very successful. I also wish the Minister on the Bench well in his task of handling this portfolio and speaking in this debate.
	We know that there is a serious crisis facing rail freight. I have here the latest RFG magazine. I will, mercifully, not quote from it because of time, but it is an excellent magazine. I pay tribute to what the RFG says; it expresses very serious anxieties. I hope the Minister will spend at least some time in his remarks today dealing with the RFG's arguments, which merit close attention. I am anxious that we are to be more concerned with cutting transport outlays than outlays on defence or security. Defence expenditure is often very wasteful. In the whole world there is not a single conventional enemy facing this country. We are dealing only with terrorist dangers. We have to be very careful about priorities and the proper use of even scarcer capital resources.
	The McNulty report, which came out in March, is an incredibly difficult document to fathom if you are not an expert on the detail. I refer briefly to the section entitled "Rail industry costs and finances", on page 15. It certainly needs a considerable brain to understand all the things in there, except to reach the general and harrowing conclusion that, for a mysterious reason which people cannot quite fathom, our infrastructure costs in terms of railway engineering remain higher than those not only in all other European countries but in other countries in other parts of the world as well. Noble Lords have already referred to the heavy infrastructure costs and bureaucracy of the Network Rail system. Equally, the infrastructure installation costs for the Transit Light tram system, which is developing in more and more British cities, are mysteriously higher in this country-by a significant and worrying amount-than in other countries. I hope the Minister will tackle that matter, too, in this debate today.
	I switch from that for one comment before I finish on High Speed 2. The Minister referred to the menace of drink-driving and what the Government are quite rightly doing. We wish the Government well in dealing with those matters. There are some horrendous recent examples of people who have been well over the limit and had some very nasty accidents. However, I hope the Minister will, if he has time, comment on drug-driving. This, too, is a growing menace. Sometimes there is a combination of both, but examples of drug-driving are growing. The police are very worried about it and more needs to be done.
	I turn quickly to mobile phones. Even if they are fixed-rather than hand-held, which is illegal, as we know-they are, none the less, a major factor in reducing concentration when driving in increasingly congested conditions, not just in cities but on our country lanes. These are more and more congested, used not only by private drivers but by trucks and lorries as well. That, too, has to be tackled. It is utterly irresponsible, particularly for parents driving with children in the back, to talk into mobile phones and not concentrate on driving complications. Incidents can spring up in seconds and it can be too late to control the vehicle properly.
	I have anxieties about High Speed 2. I remember the dramatic Statement made in March by the noble Lord, Lord Adonis-then the Secretary of State-in which he announced the plan for HS2. I am worried about the reference in the coalition agreement to this. It states on page 31:
	"We will establish a high speed rail network as part of our programme of measures to fulfil our joint ambitions for creating a low carbon economy".
	I hope that it is being done for other reasons as well, of course, but that is a very important reason. The document continues:
	"Our vision is of a truly national high speed rail network for the whole of Britain. Given financial constraints, we will have to achieve this in phases".
	The ominous warning we face is that the high-speed network might eventually be scrapped due to pressures on spending and the Government's budget cuts, subject to the comprehensive review in the autumn. Or it might be postponed, thus making it more expensive than it would have been. If that occurs, money will be wasted and we will not have the high-speed network that this country demands. Incidentally, it should go all the way to Scotland, not just to northern England. To achieve a harmonised economic system, we need a high-speed network over the whole country.
	I have touched on a number of themes which the Minister, if he has time, should deal with, as there are great anxieties about the future. People are worried that this process will take much longer than we thought.

Lord Rosser: I too thank the noble Earl, Lord Attlee, for securing this debate and enabling us to hear something of the Government's plans and intentions in the field of transport. I also congratulate him on his appointment. Earlier, the noble Earl told the noble Lord, Lord Clinton-Davis, that he would give full answers to his questions when he wound up. I too have a number of questions for the noble Earl. I hope that I too will receive full answers.
	One of the first decisions of the coalition Government was to announce that they would not proceed with a third runway at Heathrow. Perhaps the Minister could tell what us what the Government's view is on capacity at Heathrow. Do they accept that it is operating at virtually full capacity? Do they accept that the demand for flights at Heathrow will increase? If so, how much additional capacity at Heathrow-within the constraints of existing runway capacity-do the Government believe can be identified, or has the working group the Government set up recently on aviation in the south-east been drawn up in the hope that it might pull a rabbit out of the hat rather than on the basis that there is credible evidence that existing runway capacity can be increased?
	The Government appear to be working on the basis that internal flights within Great Britain will largely cease with the development of high-speed rail. When do the Government anticipate completing a high-speed rail link going north from London? What has been the reduction in flights per day between London Heathrow and Paris and Brussels following the completion of the high-speed rail link through the Channel Tunnel? What percentage of overall flights into and out of Heathrow each day did that reduction in Paris and Brussels flights represent? Have the additional flight paths that were presumably created been already taken up so that capacity is just the same as it was prior to the completion of the high-speed rail link through the tunnel? These questions are relevant to the reduction in airline traffic that would take place with a high-speed rail link going north from London.
	There are, of course, strongly held different views about the expansion of Heathrow, but the case for expanding capacity was based not on domestic internal flight capacity but on international and in particular long-haul traffic capacity. High-speed rail is certainly thoroughly desirable and needed in its own right, but it is not an alternative to increased capacity at Heathrow. France has a network of high-speed lines, but it also has five runways at its main airport in Paris.
	I hope that the Minister will be able to tell us more than he has done so far about the Government's approach to airport capacity, bearing in mind that they have already decided that one solution-namely, an additional runway at Heathrow-is not acceptable. If we cannot address the capacity issue, more and more passengers will go from this country to Paris, Frankfurt or Amsterdam, which do have the capacity, to connect with international flights, and more and more long-haul international flights coming to Europe will not fly into London. That will hardly be helpful to London as an international business centre, hardly helpful to generating economic growth, and hardly helpful to this country as a first-choice international tourist destination in Europe.
	In the other place last month, the Secretary of State referred to Heathrow as Britain's premier hub airport and said that the Government would ensure that they protected its status. Can the Minister confirm that this statement means that the Government will not be pursuing the plans of the Mayor of London to build a new major airport well to the east of London?
	Of course, one possible solution to ensuring that Britain does not lose out economically as a result of capacity issues at Heathrow is to work for international action to check the increase in air travel. Is that a course of action that the Government are pursuing or contemplating pursuing? Alternatively, are the Government looking to resolve issues of airport capacity at Heathrow and in the south-east by putting on further additional taxes or charges in the future which would increase the cost of air travel and thus dampen down demand in that way? It would be helpful if the Minister gave some indication of the Government's thinking on these issues in the light of the decisions in respect of runway capacity in London and the south-east, including the third runway at Heathrow.
	I ask these and other questions on the basis that the Minister has initiated this debate, which is to be welcomed, and because he has some answers to the obvious questions that will be put to him, not because he does not have the answers. I also raise my points on the basis that the Secretary of State has already agreed to contribute £683 million to the £6 billion of 2010-11 budget reductions and that, on the face of it, safe and sustainable transport that generates future economic growth and prosperity is not normally promoted by cutting back on funding and increasing the likelihood of reductions in investment and levels of service-and further hikes in fares.
	Can the Minister clarify some issues in respect of rail transport? Is it the Government's policy to encourage further increases in rail traffic by passengers and freight, and is it their objective to promote transfers of traffic from road to rail? If it is the Government's policy, by what means are they seeking to do it? Is it by further investment in the railway infrastructure through the construction of a high-speed line from London to Birmingham and then further north, and by electrification of existing routes such as the line from Paddington to Bristol and south Wales and one of the routes from Liverpool to Manchester? Are projects such as these going to proceed and, if so, to what timetable for commencement and completion? What is the timetable for the completion of Crossrail?
	Are the Government going to ensure that older rolling stock is renewed and stations renovated and renewed, or will work of this kind be put on the back burner, bearing in mind that the Department for Transport appears to be one of those departments that will face the full force of the coalition Government's cuts? If there is a further 25 per cent cut in the departmental budget, where does the Minister envisage that the cuts might fall? To what extent will they be on capital expenditure and to what extent on revenue expenditure? Can the Minister give an assurance that the Government are not looking at the arrangements with existing railway franchise holders with a view to agreeing to reductions in service or increases in fares above those allowed under the current arrangements as a way of reducing expenditure on rail by his department? Does he agree that reductions in levels of service and further increases in rail fares over and above the current arrangements would hardly be a step towards promoting sustainable transport if it led to more traffic going by road?
	On the subject of fares, can the Minister confirm what I believe has already been said-namely, that no adverse changes from the point of view of users will be made to the national concessionary bus fare scheme? I declare an interest as a beneficiary. The same issues of possible reductions in levels of service and higher fare increases apply in respect of bus travel. Local transport authorities already contribute heavily to the income of the bus industry, and any significant reductions in the money provided to local authorities by central government could have a major impact on the level and cost of bus services. What is the Government's policy in this regard? Do they intend to ensure that no decisions on levels of funding by central government should lead to a reduction in bus services or higher fares? Or is this an area that is going to take the brunt of the cuts and, if so, where does that leave the objective of pursuing a sustainable transport policy if it leads to a transfer from public transport to private transport, and in particular the car? What is the policy on bus quality contracts, which Theresa Villiers told the other place prior to the election that the Conservatives would remove altogether as an option outside London? Is that the policy of the coalition Government?
	Do the Government have a policy for containing the level of travel by car? Do they have a view on whether car users should pay according to the mileage that they travel? If it is the Government's objective to further promote cycling and walking, to reduce the use of the car in particular, what additional resources are they intending to invest in this field, either directly or, for example, through local transport authorities, and what do they consider the impact of promoting cycling and walking further could be on existing or projected levels of car usage? In pursuit of further progress towards safe and sustainable transport, what plans do the Government have for funding or encouraging research and development into, for example, greater fuel efficiency and clean fuels in road, rail and aviation; and what level of investment do the Government intend to put into developing and encouraging the use of electric cars and vehicles?
	In his opening comments, the Minister referred to the development of the canal network. The canals are part of our network for carrying freight. What is the Government's policy on further investment in appropriate parts of the canal system to increase freight carrying as part of their policy on developing safe and sustainable transport?
	As the Minister will know, transport accounts for 21 per cent of UK emissions-and 92 per cent of that comes from domestic road transport. It is easy to talk about moving to a safe and sustainable transport system, but it is another thing to continue the progress already made-even more so when the Government and Ministers, despite the potentially devastating long-term consequences of climate change, appear interested in ever heavier funding cuts, to the almost certain detriment of a sustainable transport system.

The Earl of Glasgow: My Lords, the reason why I am not as worried as others about the spending cuts likely to be imposed on the Department for Transport in the short term is that I believe that the next few years should be spent largely on planning for the future, rather than on short-term improvement measures. Immediate transport problems such as better road safety, overcrowded trains and airport security, important as they are, are relatively quick-fix issues. The really important decision is to establish what sort of transport network we will need in Britain beyond 2025, and how we can best start preparing for it. These major policy decisions will depend on questions such as how much we want or need to reduce carbon emissions-something that was alluded to by my noble friend Lady Scott-and also on assessing how much greater will be the demand for travel in 15 years' time; and how much we want to spread Britain's wealth, presently concentrated so much in the south-east, more evenly over the rest of the UK. These are the big decisions, and to a large extent they will determine the sort of Britain that we leave to the next generation.
	Several reports, including the Government's Eddington study, show a strong correlation between transport and economic growth. An efficient, reliable transport infrastructure is essential if British businesses over the whole country are to thrive. In the debate on the gracious Speech, I stated what seemed obvious to me, namely that future transport policy must be based on a renaissance of the train. It is potentially the most civilised way to travel, environmentally relatively clean, relatively safe and relatively stress-free for the traveller. Of course, this will mean an inevitable upgrading and extension of our existing railway network, which we are assured is already in progress. We will have to be less dependent on the motor car in future, and if we have to dig up the British countryside, let it be for a railway line and not for a new road. With a better and cheaper train service, we may not need that proposed bypass after all.
	It is hardly surprising that we in our party so enthusiastically welcomed the new high-speed train proposals, apparently supported by all parties-but we still need to be convinced that our allies in the Government are as enthusiastic about it as we are. This new high-speed railway cannot be a half-hearted, stage-by-stage, "let's see how much we can afford for the time being" project: it must be a totally committed, all-the-way project. The line must start from Scotland-Glasgow preferably, but I am biased so far as that is concerned-through Manchester, Birmingham and London and then on to the continent. Also, for the benefit of the noble Lord, Lord Liddle, it must include Carlisle. In the Queen's Speech debate, the Minister-the noble Lord, Lord Henley-assured me that the Government's intention was indeed to take the line all the way to Scotland, but I still need assurance that that means from the outset-not a presumption that a second stage of planning would start once the line had been completed to Manchester or Leeds. It appears that High Speed 2 has so far been instructed to present proposals for the line only as far as Manchester and Leeds, and that is what makes me suspicious. In spite of the Minister's assurances, might the Government still be committed to go only as far as that to begin with? I should very much like the Minister's reassurance on this.
	Scotland and the far north of England-here, again, I know that I shall get the support of the noble Lord, Lord Liddle-would find themselves at a considerable economic and commercial disadvantage if it were to take another 10 years or so for high-speed rail to reach them. To get the full benefit of high-speed rail, the line must go all the way. Immediately you find yourself having to change from a conventional to a high-speed train at somewhere such as Manchester, you might just as well have taken the plane in the first place. One of the other great benefits of high-speed rail is that it will make many of those atmosphere-polluting internal flights redundant. Here, I disagree with the noble Lord, Lord Rosser, who does not think that it will make any difference. It would certainly make a difference.
	Of course, it is unlikely that construction of the new high-speed railway line will start for at least five years, but that gives the Government time to assure themselves that they are taking the best possible route, time to negotiate terms with the objectors and time to get the best possible advice. I hope that they will not waste too much money on consultants. The advice of experienced engineers and chartered surveyors is what is needed, and that is whom the consultants will be consulting anyway. Furthermore, we should not assume that High Speed 2's recommendations are necessarily the best. The time delay will also give the Government the chance to satisfy themselves that when construction does start-in, one hopes, a much better economic climate than exists at present-they will have the necessary means to complete the job, all the way to Glasgow.

Baroness Thomas of Walliswood: My Lords, as some of your Lordships will know, I spent 12 years on Surrey County Council, including a number of years as a member, and consequently chairman, of the highways and transport committee. I was among those councillors who particularly enjoyed the work of the committee. I think that its appeal was the practical and concrete evidence of its effectiveness-or not-on the roads, highways, byways and pavements of the county.
	In preparation for this debate, I had a brief but useful talk with one of the current officers of the county council's highways and transport department, and it is clear that times are hard. Leaving aside the main roads maintained by Surrey County Council, there is, once again, great difficulty in maintaining minor roads across the county. This is not a new problem; it is one that recurs whenever the public finances are in a poor state. It appears that Surrey's new chief executive is going through the entire county budget with a fine-toothed comb. As a councillor, I have lived through similar times and it is not a pleasant experience.
	In the context of this debate, the particular problem faced by Surrey is that of maintaining the safety of the minor roads system. For much of southern Surrey, it is the network of small local roads which serves scattered villages, farms, houses and small businesses. Where I lived, south of Dorking, I could have many miles to drive, depending on where I wanted to arrive and when. Sometimes the main road was the best option but sometimes it was not. Yet, in winter on south Surrey clay, water would collect on the minor roads, traffic would veer on wet roads towards the deep ditches on either side, and freezing weather would break open last year's efforts to patch up the worst spots. I am sure that all Members of your Lordships' House who live away from towns will know what I am talking about. Nevertheless, there are many businesses which need to deliver or collect goods along those roads; children need to get to school; and mothers and fathers need to get to work. The network is essential-not just for a spin in the motor on a summer's day but for all the activities which affect family and business life.
	Unfortunately there is never the money available to ensure that this network, much of it based on ancient tracks, is really safe and fit for the traffic that it carries. That is particularly the case this year as bad weather exacerbated the damage and dwindling funds make it hard to finance the restoration of roads. It is not just in the relatively sparsely inhabited countryside that there are problems. In Surrey's towns and suburbs there are problems with cold weather damage that cannot all be dealt with. Engineers are obliged to prioritise the repairs. Those who benefit from those repairs are thankful; those who do not benefit complain.
	However, whether damaged roads are in the country or in the towns and villages, their poor condition prevents them serving the economic needs of the people. I have made only a brief speech and I want to ask two brief questions. Can we yet estimate how much money there is to deal with post-weather damage to the roads? Are the Government satisfied that utilities are meeting their obligations correctly when they have to repair the highways?

Lord Berkeley: I, too, congratulate the Minister on opening this debate, but in doing so I reflect that he must be feeling a bit lonely. Eight Liberal Democrat colleagues are speaking but none of his own Back-Benchers. It makes me wonder whether his Back-Benchers support the coalition's transport policy; perhaps he will tell us when he winds up.
	Two months after the election, I thought that I would have a quick review of the progress of the coalition's policies on transport. The policy on page 31 of the coalition programme states:
	"We will stop central government funding for new fixed speed cameras",
	and use drug analysis instead. They are rather different in their effect-and their cause, probably. The Minister mentioned that in his opening remarks. First, can he explain how removing speed cameras will contribute to a reduction in road accidents? As we are talking about roads, perhaps he can also explain whether the Government will reduce the blood-alcohol limit from 70 milligrams to 50 milligrams, which I understand would save 200 deaths a year. That sounds good but maybe we will not get that either.
	Secondly, on the HGV road user charges, perhaps he will explain what is green about that policy. It will help the UK haulage industry to compete with foreign lorries but unless the charge is quite high it will not help the environment very much.
	Thirdly, the coalition programme states:
	"We are committed to fair pricing for rail travel".
	However, in the Financial Times a week or so ago, the Secretary of State for Transport said that he would increase rail fares more than inflation. As the noble Lord, Lord Snape, mentioned earlier, that would surely reduce the number of passengers using the railways and encourage more people to go by car. What is safe and green about that?
	Fourthly, the programme states:
	"We will support sustainable travel initiatives, including the promotion of cycling".
	Will the Minister confirm whether the Government are removing the advance stop lines at many intersections, which are there to create a nice green box for cyclists to go into? Apparently Ministers believe that cyclists are slower than cars so the cars should get away fast. That is a policy for reducing rather than increasing the number of cyclists on our roads.
	I am pleased that the Government will,
	"reform the way decisions are made on which transport projects to prioritise".
	I think that is longhand for looking at the new approach to transport appraisals, which I welcome. Perhaps the Minister can explain when they are going to start.
	Lastly, I want to concentrate my remarks on the Government's statement that they,
	"will make Network Rail more accountable to its customers".
	I fully support that. I declare an interest as chairman of the Rail Freight Group. The noble Lord, Lord Dykes, got there first and I am grateful to him for his declaration on my behalf. I am also one of the 100-strong membership of Network Rail, to which my noble friend Lord Snape alluded.

Lord Snape: Perhaps I may exempt my noble friend personally from any criticism of the 100 members of the board.

Lord Berkeley: I am grateful to my noble friend, but perhaps he had better wait to hear what I have to say. Infrastructure management and privatisation became Railtrack's responsibility and most noble Lords would, I think, agree that that was a disaster. In management and engineering terms, it was a good way of siphoning perhaps £4 billion of public money straight from the Government to shareholders, but it did not last very long.
	The new Network Rail is, I believe, much better than Railtrack in the sense that the network is in a much better condition. It is reliable and there has been a lot of investment in it. However, as the noble Lord, Lord Dykes, and others have said, the costs are getting very high. The Office of Rail Regulation has required Network Rail to halve its costs over 10 years, and we are about half way through that, but it still has a long way to go. As regards the value-for-money study chaired by Sir Roy McNulty, the document referred to by the noble Lord, Lord Dykes, is very significant. He was given a number of options and was told, first, to cut services; secondly, to grow services with increased costs, which is clearly unacceptable; and, thirdly, to do it cheaper-and if you do not do it cheaper, you have to close things. We need to work out ways of getting Network Rail and to some extent the train operators to do it cheaper. But we must be careful not to throw the baby out with the bath-water.
	Noble Lords and people outside have come up with many ideas about what to do with Network Rail, which could range from a new management team to deliver cultural change, to breaking the company up into regional businesses, and, of course, the usual story of vertical integration-nationalised or in the private sector. However, we must be careful about the problem that we are trying to solve. It is easy to refer to benchmarking and great savings, but one must look at the detail and I suggest that the devil is in the detail.
	I am against breaking Network Rail up. I certainly support Merseyrail's idea of having a separate network there, probably extending to Wrexham, and to do a little bit of benchmarking. Of course, Transport Scotland is promoting a new line to the Borders, which will be designed, built and operated entirely without Network Rail. Therefore, that will produce some benchmarking. However, I calculate that if, for example, Scotland was separated off into its own infrastructure, there would be five passenger operators there and as many freight companies. The bureaucracy of the extra agreements between all these people in different areas would make it more complicated rather than less.
	The problem with Network Rail is that, although it is far from perfect, the extra costs are in what we might call the sticky bits-the laws, the processes, the standards and the procedures that seem to govern every action. The other day, I was on a train going down a freight branch line when we were stuck on the main line for about half an hour. I asked the Network Rail person on the train, "What's the problem?". He said, "Well, they're unpadlocking the points. In my day, 20 years ago, it took one person five minutes and now it takes three people 20 minutes". It is the same job, so why does it take that long? Yesterday, I received an e-mail from some people stating that it was time that the railway did some research into dogs and their owners walking perhaps on a footpath beside continuously welded track. They said that the dog might get excited or worried by the whine of a train approaching and pull the owner on the lead towards the train and hurt the owner. I thought: why do we want to bother with things like that? If people cannot control their dogs and have the lead wrapped around their hand several times, why does the industry need to talk about research? Those are two stupid examples, but unless we start at the bottom and ask, "Do we need those standards at all?" and all that goes with them, we will not get anywhere.
	Some suggest that Network Rail should be sold off, but we tried that with Railtrack, did we not? I think that we should improve what is there and define what kind of company it should be. It has decided on its own that it should emulate a public limited company and get efficient going forward with maximum achievements and, of course, maximum bonuses. That is its decision. No one has asked it to do that; the Government have never asked it to. It justifies that on the basis that it is like a plc. It is nothing like a plc, because it cannot go bust. We all know that no one would allow it to go bust, and, anyway, there are no shareholders. I am one of the 100 members, and our liability is limited to £1, which I suppose is comforting.
	Should it not have some public interest duty to influence its activities? I do not think that the membership structure has worked. Network Rail effectively still appoints most of the members. We do not hold the company to account; that will not change. There are various alternatives which I hope that the Minister will consider. One of them has been mentioned before: a two-tier board, with the higher one to ensure that the public interest in the railways is maintained. Alternatively, members could all hand over their membership to the Secretary of State. When I put that to a Minister he said, "That's fine. What happens if the members don't want to hand over their membership?". The answer is simple: turn off the finance. That might focus their thoughts. The third alternative is a mutual, with a small number of members elected by all interested stakeholders. That would give members legitimacy and a smaller number.
	The real issue is that the board and the management need to reflect Network Rail's public interest role, as well as driving efficiencies. It must drive them much more strongly from within. Ian Couch has done well up to now, but we now need someone else. It needs a new team dedicated to creating the most cost-effective, cost-efficient and least bureaucratic infrastructure manager in the world. I suggest that the figure of two to three times the best cost, which we have heard in this debate and from the regulator before, comparing Network Rail with other infrastructure managers, is mainly due to bureaucracy. It is the bureaucracy that must be cut through with a sword, because I do not want bits of the network to be lopped off because we cannot do it cheaper, we cannot run Parry People Movers or anything else. As someone else said in this debate, we do not need high-speed lines for Parry People Movers.
	I hope that the Government, in considering what to do with Network Rail, will not throw the baby out with the bath-water but will make strong intentions clear that it must change. Whether that should be done from without or within, I do not know, but I will certainly support such change.

Viscount Falkland: My Lords, it is a pleasure to follow the noble Lord, Lord Berkeley-in fact, I have changed the order of my speech, which will be devoted to two-wheeled transport, to start with cycling, whereas I had intended to start with what are inelegantly now called powered two-wheelers. He made some interesting remarks about cycling. Not only do I follow him in speeches, I follow him on the road on many occasions. He is much quicker than I am, although we have a similar bicycle. He rides expertly. His bicycle is more highly geared than mine because it has been hotted up. He rides speedily with extreme expertise and I only wish that most of the other cyclists that one comes across rode in such a mannerly way. That is part of the problem with cycling in terms of its relationship with other road users.
	The noble Lord raised an interesting point, of which I was not aware, about the discussion about doing away with cycle spaces at traffic lights. That seems an odd idea because cycling is increasing as an activity. More and more people are taking their fate into their own hands, because cycling is fairly perilous at the moment if you are not experienced and careful. If they do away with the space, as the noble Lord suggests, I do not know how they will avoid more accidents taking place because the numbers of cyclists, motor cyclists and cars that gather at a traffic light, all rushing to get home-particularly if they are going to watch a football match or something-will cause a great many problems. I look forward to hearing much more about that.

Lord Berkeley: Just for the avoidance of doubt, I say that I am not recommending that the front stop line should be removed; I am complaining about it.

Viscount Falkland: I understand the noble Lord's point. I thought that I intimated that I agree with him. He did not mention the unfortunate accidents, often involving young women, at traffic junctions, although I hoped he would. They get caught between the kerb or the side of the road and a large lorry turning left. A lot of those who have been caught in that situation bear some responsibility. One is enormously sorry for the injuries that they suffer and the deaths that occur, but there is a lack of road sense. However, we cannot expect everybody to have the road sense of the noble Lord. Quite apart from making the lorries put special mirrors on, local authorities and the Government must look carefully at making sure that there is some kind of marking or indication at those junctions to make vehicles go wider, so that if people do find themselves in that unfortunate position they have some way of escape.
	The problem with cycling generally is that a lot of people are inhibited from cycling, and I do not blame them, as I have said before in your Lordships' House. Yesterday, I took a ride from Kensington Gardens across Chelsea Bridge. The other side of Chelsea Bridge, alongside Battersea Park, is notorious because all the cycle lanes are full of parked cars. On a Sunday, traffic is particularly bad because people are out at the weekend and are not paying particular attention. I had to stop before a car that was parked in the cycle lane to let the traffic, which was going so fast, pass. I felt so insecure until it had gone past, and then I went into the middle of the road again.
	My original question on this subject was answered well by the previous Government, but nothing is done about it. They explained to me what constitutes illegal use of a cycle lane. Yesterday, those vehicles were blatantly in the wrong place and creating danger. How can we expect people to enjoy cycling and to encourage their children to go cycling when they meet that kind of hazard at a weekend?
	The last Government's approach, which I hope will be continued under this Government, was to have a cycling policy that encourages people to take up cycling. However, I hope that they will take special care for the safety of cycles, particularly by enforcing certain basic laws. There is absolutely no excuse for cycles to be ridden at night without lights. Not only does it endanger cyclists themselves, it puts motorists into a position where they could be involved in a fatal accident for which they would have no responsibility whatsoever. I hope that there will be a drive by the Government to ensure that riding without lights is stopped. I find it more alarming than people using mobiles in their cars, which is bad enough, so it is essential that this is dealt with. Certainly it is one of the laws that I would like to see enforced.
	With the Olympics coming up and more cyclists expected to come to London to enjoy our parks and the good aspects of cycling in the city, unless something is done before 2012 the Government ought to put out a warning for cyclists coming from countries which have a more favourable cycling culture. I mention Holland, France and others. The warning should say, "You are coming to England. Enjoy yourself and bring your bike, but be careful because you are going to meet indifference to cyclists on the part of other road users". Taxi drivers look upon cyclists as a necessary nuisance, something they do not do to motor cyclists. Also in London, vehicles have a way of coming alongside cyclists and intimidating them. That is not something you would find in Paris, Brussels or Madrid, and I have cycled in all those places. As I say, unless something is done, there are going to be fatalities. Foreign visitors are going to die. Therefore to have a hire scheme, as the Mayor of London is suggesting, would be excellent if you ignore all the dangers. But to do that with the situation as it is-bad roads and rude, uncivil and intimidating road users, whether they be in commercial vehicles or in cars-encouraging people to come here and hire cycles or bring their own is just not fair.
	I do not want to take too much time, so I shall move on quickly to motor cycling. Successive governments seem to have shied away from having an integrated policy as regards motor cycles. Motor cycling in Britain is not an inconsiderable activity. We are told that, if one includes those who ride scooters and mopeds, around 15 million people are riding regularly. It brings around £7 billion into the economy. The manufacturing business, which disappeared almost entirely at the end of the 1950s and beginning of the 1960s in the face of Japanese competition, is now coming back. British manufacturers, on a smaller scale, are actually doing rather well. I refer particularly to the Triumph Company. Some 20 years ago the name was bought and the business has been built up to become one of the most successful motor cycle manufacturers in the world. There are factories in Hinckley, near Coventry, which I have visited many times. The company has incorporated the best technology from around the world, particularly from Japan. Mr Bloor, who started the company, is dedicated to having a British business. He hoped to use more British components in the machines, but he did not reach his target because of lingering differences with the Japanese with regard to maintaining quality and delivery, which, I am afraid, is still part and parcel of our industrial heritage.
	Motor cycling is an important area, but I am bothered about the Government's seeming hesitation over creating a properly integrated policy that includes powered two-wheelers-I use the expression again-and wonder whether it is to do with an overriding fear about safety. Safety is always a problem with a vehicle as unprotected as a motor cycle. However, motor cycles are actually very safe these days. The powerful ones have a capability for high speeds, of course, but the smaller ones are just as dangerous. Unlike in other countries, most accidents take place not because of speed on fast roads but at junctions, roundabouts and places of that kind. Most accidents are due to rider or driver fault, lack of road sense and so on.
	The main attitudes prevalent on the roads these days are those of not caring or not having consideration for other road users. That is the overriding concern. It is why the previous Government incorporated the European Commission's plan for testing new riders. The new test, which is taken almost as it was constructed and designed in Brussels, has been adopted and a great deal of money has been spent on testing centres and new testing programmes. It has proved a disaster so far. The test is far too complicated and there have been a number of injuries when people are required to show how to skid properly. You learn that through experience, when you are being careful, I hope; you do not need to be tested. In the old days, when you were tested by a man with a millboard who poked his head out from around a wall, the test was perfectly adequate. There were no more accidents in proportion with other road users than there are now.
	Young people trying to get into motor cycling now find it extremely difficult. It may be the aim of the Government not to encourage motor cycling but to get rid of it altogether. I do not think they will be able to do that but, given the way in which they are locating these new testing centres an average of 23 miles away from an applicant's home, and given that the cost to a young man of a licence for a larger bike is more than £1,000, it will not encourage young people to take the test. One of the great hazards on the road is the number of people who are riding without insurance and road tax. Although the police have increased their methods for finding such people, the more of them who are on the road because they cannot afford to take the test-somehow they get hold of a bike and manage to avoid the police-the more chances you have of accidents. If the Government are producing the test to reduce the number of accidents, it will do the opposite.
	That is the end of my observations on two-wheelers for today. I intend to come back to the issue as the coalition proceeds. I hope that we will see something a little less lily-livered from the department than we had with the previous Government. I stood down from the All-Party Parliamentary Group on Motorcycling because I did not like the way in which my colleagues were paying lip service to what I thought was the uninformed and rather condescending manner of visiting Ministers and officials, none of whom had ridden a motor cycle as far as I know. Having said that, I am on the warpath; I hope others will join me.

Lord Clinton-Davis: I am very much involved with BALPA, having been the president of the British Airline Pilots Association for 30 years-far too long, some say.
	Like so many other transport issues, aviation, unfortunately, has disappeared from the Minister's radar. It is not his fault, I hasten to add, but is essentially the fault of the Government, who have failed to address so many vitally important transport issues. My task today is to speak about aviation. I spent more than 36 years involved with the topic-as Parliamentary Under-Secretary in the House of Commons; then in opposition; four years in the European Commission; and finally in the House of Lords as a Minister-besides being the president of the British Airline Pilots Association.
	Aviation is an essential part of Britain's economy. It accounts for about 1.5 per cent of our GNP. It generates more than £80 billion in gross value added to the economy. It is a massive employer. It contributes nearly £5 billion in tax revenue. It carries no fewer than 240 million passengers per year and well over 2 million tonnes of freight. European aviation makes a huge contribution to the economy of the whole area.
	Of course, there is an emissions problem-we hear a great deal about that in this place-but the 6 per cent of carbon emissions for which it is responsible is far less than that of power stations, domestic sources and road transport, which respectively account for 31 per cent, 22.5 per cent and 21 per cent of our emissions. So let us get this problem in perspective. Enormous environmental gains have been accomplished during the past 30 or 40 years. Air transport is now infinitely quieter. Fuel efficiency has virtually matched this. Air traffic management and flight control have improved. I am absolutely certain that progress in all these respects will continue, notwithstanding the present economic difficulties from which we are suffering.
	Safety is of course paramount. By any reckoning, the United Kingdom's fatal accident rate, which is something like 0.08 per million flights, is absolutely remarkable. Although it dwarfs the worldwide accident rate, which is still very low, this statistic is worth emphasising. I do not want to tempt fate, but the history which British aviation has to relate is very significant.
	To perform well, aircraft need airports. Heathrow, our principal airport, has reached saturation point, yet the argument for a third runway, approved by the previous Government, is now rejected by the present coalition. What is proposed? We cannot get by on silence, yet that is what we get from the Government; that is what was asserted today from the Minister. To pretend that we can get by with Heathrow as it is is fanciful. In this respect, they are the do-nothing Government.
	There are, of course, other airports, as my noble friend Lord Rosser pointed out. They would welcome this inertia-Paris, Frankfurt and Amsterdam-and BA proposes that Madrid may be the answer, but that cannot be so for the multitude of potential passengers in northern and middle Europe. The effect of this sterile situation on British aviation would ultimately be disastrous. Heathrow and British Aviation would not altogether go down the tube, but they would be consigned to the role of bit players compared to their rivals. Inevitably, that would leave a deadly imprint on our economy.
	I turn to the immense challenge to aviation, indeed, to our way of life, posed by volcanic ash, which has not so far been mentioned. Unfortunately, the world's scientists have not fully comprehended this particular problem. There is a real risk that there may be another eruption in the near future and once again we may be confronted by another imponderable event. I recognise that this represents the gloomiest view, but it should motivate us to learn more and listen to the volcanic scientists with increased care and a greater degree of urgency than we have so far exhibited.
	My own union's chairman and general secretary visited Iceland in the past few days in a quest to procure more information at first hand. Although it is still early days, we will await their report recognising that it will add to our knowledge of the problem and, let us hope, point the way to solutions. It goes without saying that, if their report should prove to be helpful, it will certainly be made available to Ministers.
	So far, the loss sustained by the first volcanic ash eruption is immense. No less than £5 billion is the total cost to our gross national product matched by tremendous losses in productivity. Airports were shut down and no fewer than 67,000 passengers in Europe were affected by this phenomenon. A possible repetition of this disaster cannot be dismissed.
	As my noble friend Lord Adonis, who was Secretary of State for Transport under the Labour Government, has stressed, the role of the EC and Eurocontrol must be co-ordinated in Europe. Supporting the Single European Sky initiative in a speedier way is absolutely imperative, besides other essential work. Inconveniences to passengers, losses to airlines and the evaluation of risk have all got to be undertaken. Indeed, as a result of the work so far done by the EU Transport Council, that is happening. I hope that notwithstanding the present Government's hostility to Europe, that invaluable work will continue unabated. Perhaps the noble Earl, Lord Attlee, can give us an assurance as far as that is concerned when he winds up.
	There must be international action in this field. That is why the transport council has called for international experts in a working group to examine scientific methods of investigating and combating these threats in time for further and urgent consideration. We will have a meeting of the ICAO General Assembly in September, so it is urgent to have answers to these problems from the Government. This natural phenomenon may strike rather earlier than September. What would happen then? Of course, the effects would be inflicted on airlines and airports, but passengers would also be affected. What have the Government got to say about that possibility?
	In conclusion, first, my hope, and that of the British Airline Pilots Association, is to ensure that flight-time limitation regulations are scientific and that there is no regression from UK standards. Secondly, I hope that there will always be complete honesty and openness in promoting flight safety. There can be no room for doubt about that. I should like to make two further pleas, which I think should prevail. Future legislation should provide for flight data monitoring as a tool to identify safety trends and not for disciplinary or discriminatory purposes. We should avoid any legislation which would allow cockpit video recorders to become mandatory. I hope that these matters will all be considered by the Minister and the Government, not necessarily today, but certainly in the near future, and I hope that the Minister will write to me about them.

Lord Roberts of Llandudno: My Lords, we all have aspirations and we know how we could spend a tremendous amount of money in improving the travel facilities in our country. In Wales, we would love to see the electrification of the line from Paddington to Swansea and possibly for it to go even further. Some day that might happen. But we wonder sometimes if the money already spent was wisely spent. We have the new signalling project on the Cumbrian line, which cost £90 million. I wonder what the Minister will say about what will happen. Will that pilot be continued in other places? This expenditure seems to have been rather wasted. We could have had instead, say, 90 new railway carriages or much else, if only that money had been thought through at the beginning.
	Other problems are arising and needing attention in Wales. I live quite near the port of Holyhead, which is a major port linking not only the UK mainland but also the European mainland with Ireland. There are dreadful worries about the crossings. It is a long journey for someone from eastern Europe who wants to drive a 40-tonne or more lorry from Dover, the north-east of England or other places on the south coast to Holyhead. What is the problem? I have been told that the problem is secure rest areas where lorries, including their freight, can be safeguarded. There needs to be immediate attention to providing such rest areas with adequate toilets and washing facilities. What does the Minister have in mind to tackle this problem on the journey from England to the north-west of Wales?
	The reverse journey is easier because the drivers are not tired. They will have had a rest on the ferry crossing from Dun Laoghaire or Dublin to Holyhead. They are rested before the journey through the spectacular scenery of north Wales. There are problems. Then they go over to England and there is a long journey back to Poland, Lithuania or wherever.
	How can we tackle this problem in a positive way? We know that many of the vehicles on that road have been found to be defective in one way or another. The Dalar Hir examination centre near Holyhead has a stopping point where these vehicles are examined. The figures I have are for 2008: 2,270 lorries were examined and 1,167 failed these compliance checks-that is, around half. Of these, 10 of the 11 from Romania failed the test, as did 10 of the 12 from Italy, 136 of the 229 from Northern Ireland, 688 of the 1,322 from Ireland, 135 of the 312 from the UK and 51 of the 129 from Poland. Why did they fail? Failures were often due to bad brakes or excessive weight. There are on-the-spot penalties now, and since they were introduced, something like 22,000 foreign drivers and 12,500 UK drivers have been penalised.
	Someone suggested that we should look at the effectiveness of VOSA, that it needs to be reviewed and its remit widened so that it includes co-operation with highways agencies, the police and the UK Borders Agency. We should look again, at the BMA's suggestion, at reducing the legal limit for alcohol from 80 milligrams to 50 milligrams. That would bring us into line with the rest of the European Union.
	Accidents can also be reduced-they will not happen-by very simple and inexpensive measures. I stand here as a proud Welshman today because the A40 between Llandovery and Carmarthen has been described by the Road Safety Foundation as the UK's most improved road. I am delighted at that. Junctions have been upgraded-it was mentioned earlier that road junctions are the most dangerous places for motorcyclists, cyclists and ordinary vehicles-and there has been extensive resurfacing. There has been a 74 per cent reduction in accidents. I was told that as many as 20 lives could have been saved because of this upgrading.
	The most persistently dangerous road in the UK is said to be the A537 between Macclesfield and Buxton. I would say to the people there, you want to follow the example of Carmarthen and Llandovery.
	I was travelling along that part of the A40 only last Friday, and already foliage and branches are hiding the wording on the road signs. I have travelled that road hundreds if not thousands of times, but I found myself thinking, "Oh. Am I going the right way? Am I going to Conwy and Betws y Coed, or wherever it might be?". Someone who was not familiar with the road would be even more confused. Confusion leads to distraction, and distraction will lead to accidents.
	We are happy that there are fewer accidents on our roads. Comparing 1994 to 2009, in Wales there has been a reduction of 45 per cent in accidents to pedestrians and cyclists, which is something to rejoice in, and a 26 per cent reduction in car accidents, but only a 17 per cent reduction in accidents to motorcyclists. Clearly we have to look at this again and pay extra attention to the safety requirements of motor cyclists. I am sure that some of my colleagues on these Benches will be able to give us a great deal of advice on that.
	Finally, secure rest stops for lorry drivers could be introduced without being very expensive. On the ferry crossing from Holyhead to Ireland, people could have a rest, but perhaps those who are unfamiliar with the English language-and less familiar with the Welsh language, which is on so many of our signposts-could use that time to learn a few of the phrases and to understand a few of the road signs that they will meet along those Welsh and English roads.

Viscount Simon: My Lords, I congratulate the noble Earl on his appointment and wish him well.
	It is rumoured that the consultation document A Safer Way is suffering in a policy vacuum under the new Government and that we could be back to square one with regard to road safety strategy beyond 2010. I wonder what priority the Government are giving to the publication of the road safety strategy and targets beyond, say, 2012. I join the noble Baroness, Lady Scott, in expressing deep concern that road safety professionals working at local level may no longer be able to argue their case for road safety funding and that road safety research could be dramatically scaled back. Success in road safety over the past years is evident, but the trend will not continue without effort and adequate funding.
	On the matter of funding, I should add that the amount of road safety support grant that is spent on speed cameras is lower than the amount that is brought in from fines, although this is reducing annually due to alternative solutions such as average speed cameras and speed awareness courses.
	I wonder, as an aside, whether the Minister is aware that if police vehicles in all 43 forces were the same in appearance and had the same equipment on board, there would be efficiency savings. Forces already receive substantial discounts through shared procurement contracts, but there are yet further savings to be made by standardising vehicle design.
	On the subject of vehicle design, the noble Lord, Lord Teverson, mentioned battery-powered vehicles. That set me wondering. What is the price of a second-hand battery-powered vehicle? If the batteries are no longer powered, what is the cost of replacing them? How long do they last? What levels of CO2 emissions are produced in manufacturing new batteries?
	The North report has, in general, received solid support and would bring us into line with most European Union countries. It has been acknowledged that alcohol increases the risk of having a collision, as other noble Lords have said. It is estimated that up to 65 lives-some think that the figure is higher-would be saved annually if the drink-drive limit was reduced. That does include drink-related casualties in Scotland. It makes sense to reduce the blood alcohol level and I ask the noble Earl when this will take place, as rumours are flying around that the Government might not implement the recommendations.
	The North report also calls for new powers for the police to do random breath testing. We know that in practice the police can stop any vehicle that they see being driven on a road without reason and, if they suspect the driver to have been drinking, they can ask for a breath test. However, most drivers do not realise that. If the police had the ability to do targeted random breath tests, that would increase the perception of risk of being caught and discourage that small number of people who are still prepared to drive while over the limit. I should add that random breath testing is being successfully used in a number of other countries. I declare my interest as an honorary member of the roads policing central committee of the Police Federation of England and Wales.
	When the Serious Organised Crime and Police Bill was passing through our House, I had two amendments accepted that, I have to admit, some people might have considered to be of more relevance to another Bill. However, the purpose of one of those accepted amendments was to introduce roadside evidential breath testing. The kits are, I believe, already in production, but there is not yet an agreed technical specification against which they can be evaluated. As such, they are not yet approved for evidential use in this country.
	The benefits of these breath kits are very wide and they would be an excellent addition to lowering the limit according to the North report. At the moment, somebody who fails the breath test at the roadside is taken to a police station where an evidential breath test is taken. The time between the two tests can be up to two hours, depending on how busy the police station is, during which time there is a reduction in the alcohol level. The roadside kit would give the actual reading at the time the driver was stopped and can be used in court. In turn, this would create the potential for huge savings in bureaucracy, and increase public perception of the risk of detection. I ask the Minister when approval will be given to these meters.
	We read that 80 per cent of drivers understand that speed cameras are an essential part of the approach to casualty reduction. As the support grant has been reduced and pre-emptive action is based on perceptions of ministerial comments, it seems that the system is under review. However, it is an offence to exceed the speed limit, so people who receive points on their licences are in control of their vehicles and should not complain. There are alternative casualty reduction measures such as average-speed cameras, active speed management and the potential for technological solutions to mobile phone use and other distractions. I understand that the NDORS scheme-the National Driver Offending Retraining Scheme-which reduces recidivism, has been well received and therefore must save lives. Average-speed cameras are obeyed by most drivers and should be used more widely.
	Roads policing is fundamentally important. It is often forgotten, or overlooked against local policing considerations, that the biggest and most transient community is on the roads. The roads are also the place where our citizens face the greatest risk of death, injury and damage to their property. Criminal activity and the networking of criminal groups are facilitated by using road vehicles and carry a whole host of examples of criminals, poor drivers and aggressive people with behavioural problems when behind the wheel. Most people think that the roads policing officer is concerned only with bad driving or exceeding the speed limit. That is not so. I always say that they are police officers first and roads policing officers second. Therefore, their arrest record for non-driving offences is very high. However, when a road is closed for investigating a serious collision, people become very angry. It has to be considered as a crime scene, with time spent on extracting and tending the living, removing the bodies and examining the debris and marks left on the road. After all, there is always the issue of dignity, respect for the dead and the right of the family to know how their loved one came to die. I often wonder why this attitude differs completely when a road is closed for, say, examining a house fire that might involve arson or the death of a person. That road might be closed for some days but people do not complain, even though the scene is off the public road.
	Finally, and to provide a little food for thought, when next held up by a road collision, just think to yourself that motorists are held up more by road works than they are by road collisions.

Lord Bradshaw: My Lords, we have had a wide-ranging debate tonight. I do not envy the noble Earl who has to sum up in a few minutes' time. He has been shot at from all directions. I first make a suggestion to him. There is probably the scope for immediate cost reductions in the way we run our railway. There has been an offer from ATOC-the Association of Train Operating Companies-and, I believe, the ROSCOs which hire the rolling stock, to be allowed to make some suggestions on how money might be saved. There is such a thing as the service level commitment, which makes franchises run certain trains which must stop at certain stations. In these times, when we are searching for economies, the opportunity should be taken to allow the professionals in the industry to put forward suggestions on how money can be saved. I assure him that a lot of money is involved and that it would be worth while doing this.
	I am sympathetic to the remarks of the noble Lord, Lord Greenway, on the Equality Act. I raised this issue when the Act was going through your Lordships' House and was told that the House of Commons was dealing with it. However, it did not deal with it and the issue remains a very serious threat to British flagged shipping. If the regulations are carried out, our merchant fleet would be greatly diminished. However, I cannot share his sympathy for the Greek shipping magnates who found New York a less comfortable place. I wonder whether they find Athens any better at present.
	I am pleased to hear that there will be an effort to make foreign lorries pay for using our roads. I am anxious to see some sort of lorry charging scheme introduced because, apart from anything else, it would be a way of managing the use of our roads. If we are not going to build any new roads, we must better manage those we have.
	The noble Lord, Lord Teverson, referred to the next generation of propulsion for heavy lorries. Although we can look forward to electric cars, I do not think that the prospect of electric lorries is very near, certainly not at the weights proposed. The need to expand the rail freight network and the rail terminals is urgent.
	I was rather interested in the renaissance of the noble Lord, Lord Rosser, who managed to contain much of his criticism when he sat on the government Benches but now seems to believe that he can open fire with all barrels at the coalition, which has existed only for a very short time. Much of what he said comprised speculation about what might happen, not a response to announced policies.
	I shall be a little controversial now and talk about the bus industry, which is in a parlous financial state. It is burdened by the concessionary fare scheme, which was introduced by the previous Government without the necessary funding. I believe that the Treasury intends to cut the bus service operators' grant, which used to be known as fuel duty rebate. If the Government do not have enough money, it may be necessary to make a small charge for concessionary fares. If local authorities and the bus industry do not have the money, the ironic situation will arise in many shire counties whereby people may have a free bus pass but there will not be any buses on which to use it. Thought needs to be given to that.
	Like other noble Lords such as the noble Viscount, Lord Simon, I welcome the North report, which is expertly argued. I look forward to hearing the Government's intentions with regard to implementing the random tests and the new blood-alcohol level tests.
	I noted what was said about phasing out speed cameras. However, one of the greatest problems is people who drive without insurance. While they are not necessarily picked up on a speed camera-although they might be-the automatic number plate recognition vehicles are very good at picking out uninsured and unlicensed vehicles. I should have thought that most law-abiding citizens and law-abiding motorists would welcome further use of those to remove from the roads people who are not paying their share.
	I believe that the best hope for new investment in the railways is reform of the franchise process. The noble Earl will no doubt have seen the article in the Times this morning in which Virgin Rail says what it would do if its franchise were extended, and no doubt it would do so. But I take what it says there as the first instalment of what we should expect from it. It has done pretty well out of the current franchise and we should expect passengers on that railway to be amply rewarded for any extension given. The Minister with responsibility for railways made a Statement in the other place on 17 June, inviting comments on the reform of franchising. I hope the noble Earl will make sure that copies are available in the Library of this House so that people here also can comment.
	My noble friend Lord Dykes referred to cheaper European standards for railways and light rapid transit. This is a very serious issue. When we say that it is cheaper on the continent, we mean that it is half price or less on the continent. It is not a small gap. The Government should investigate carefully why the costs here are higher because we need to know the answer.
	My next point is the serious issue of railway and bus fares. Talking as an economist, I would point out that the elasticity of demand for railway and bus travel used to be 6 or 7 per cent, so that if you increased fares by 10 per cent, you lost 6 or 7 per cent of the passengers but you were better off. The latest research, to which I direct the noble Earl's attention, shows that the current figure is nearer to 13 per cent. So if you increase fares by 10 per cent, you will lose 13 per cent of your passengers and you will be worse off-fewer people will be travelling and more will be diverted to the roads. This is an extremely serious issue and proper attention needs to be directed to it before any snap decisions to increase rail fares are made.
	Like the noble Lord, Lord Berkeley, I am concerned about the whole question of appraising transport projects. At the moment, this is done by an exceedingly complicated econometric process which employs large numbers of staff in the department, and by consultants who get most of the work. Work is also done at the local-government level. I trained as an economist, but, at about the third or fourth page of such appraisals, there were so many Greek symbols and equations that I could not understand what they were saying. I am sorry, but any system of appraisal that is too complicated for the average person to understand is probably past its sell-by date. We need something new.
	I support the noble Lord, Lord Snape, in saying that the sooner Merseyrail is transferred away from Network Rail and the sooner it can maintain its own network, the better it will be. That will allow cost comparisons, perhaps not between the costs on Merseyrail and elsewhere but between what Network Rail quoted for doing the work in Merseyside and what it would cost Merseyrail to do the work itself. There is no safety implication because Merseyrail is run by Serco and NedRailways, both of which are very respectable and unlikely to let standards drop.
	There was an article yesterday in the Independent on Sunday about the successor to Iain Coucher, stating that Network Rail had engaged head hunters to scour the place for international big hitters to come in. Perhaps I may suggest to the Minister that we have probably had enough of international big hitters. If I could choose, I would go for someone who had successfully run a train operating company and experienced the obduracy and total incompetence of parts of Network Rail, and he could go in and put these things right. This is a time for imagination-picking someone who can do the job rather than someone who appeals to the City, although I should think that that does not matter much bearing in mind that Network Rail does not have any shares anyway.
	I endorse the point made by the noble Lord, Lord Roberts of Llandudno, about the signalling system on the Cambrian line. It might seem a minor point, but Network Rail has spent £90 million developing the scheme, which does not work-and it proposes to spend more. Occasionally you have to say, "Enough is enough, we are not going to be pioneers in this technology but followers when other railways elsewhere have ironed out the bugs from the system".
	Electrification is an extremely important thing. I say to the noble Earl, for goodness' sake get the priorities right-electrify those parts of the railway that give the quickest return for cash flow. Here I speak against my own railway, the Great Western. I would not spend money there because it is so long before you get any return. However, if you electrified the Midland main line north of Bedford, you would get immediate returns-and as you move north to Leicester, Sheffield, Leeds and Derby, more cash would come in and the scheme would quickly be self-financing. We must remember that the diesel trains on the route are capable of being fitted to pick up electric current, because they have diesel-electric engines.
	I will finish with two points. First, I bring to the noble Earl's attention the fact that railways can be a significant growth engine. Most noble Lords will remember what Iain Duncan Smith said last week about people living in houses where they had security of tenure, but who had never worked. He talked about moving those people somewhere where there was work. I draw the attention of the House to three examples: the line from Alloa to Stirling, the line from Falmouth to Truro, and the Ebbw Vale railway. Each has caused a large increase in the use of the railway, much of it by the sons and daughters of the people who live in houses, who have taken to commuting to Cardiff, Edinburgh or places like that. The Ebbw Vale work was done by local government in Wales, because Network Rail not only quoted a much higher price, but said that it could not do it anyway, which was hardly encouraging.
	Lastly, the noble Earl referred to the continuing support for Crossrail. It is very important that we continue with Crossrail and Thameslink. It is important that the problems with Thameslink at London Bridge are sorted out-and whatever we do in the way of economies, we should not economise on the central sections of those lines. We should provide full-length platforms so that, as demand grows, we will be able to provide the most comprehensive service. I hope those few points will give the noble Earl something to think about.

Lord Davies of Oldham: My Lords, I, too, begin by congratulating the noble Earl, Lord Attlee, on his new ministerial role with regard to transport. Of course, I point out what is evident from this debate; he plays his part in a Government who are not without their internal tensions, which are evident already, as my noble friend Lord Berkeley pointed out. In winding up the debate for the Opposition-this is the first time that I have played this role-I must say that I had not realised how difficult it was. It was bad enough on the other side having to answer questions, but when one finds the whole content of one's speech already pre-empted by the contributions in the debate one is somewhat at a loss for points to emphasise.
	My noble friend Lord Berkeley pointed out that every member of the governing parties speaking in support of the Minister in the debate was a Liberal Democrat. Not a single Conservative is interested in transport, or if they are they fear the worst-namely, that with the former Chief Secretary as Secretary of State for Transport, the cuts will be implemented with a degree of force and venom. The noble Earl, Lord Attlee, will have recognised-not just from Labour Benches this evening, forcefully though the points were made there-that sustainable transport, and its role in generating future economic growth and prosperity, requires some government expenditure and investment. That point was also put ably and very strongly by those on the Liberal Democrat Benches.
	I hope that the Minister will recognise that some of the more obvious generalisations that he made in his opening remarks will not suffice to meet the very real questions that have been raised on both sides of the House during this debate. To take one obvious area, what did he mean when he said that Heathrow needs to be better but not bigger? What does that mean in terms of the airport's effectiveness? What is feared on all sides is that the approach to Heathrow will merely benefit competitive international airports as Heathrow is unable to cope with the expansion of traffic. The noble Earl may be suggesting that growth in aviation will somehow be choked off by the depth of the recession, but it would be a double dip with a vengeance if we reached that stage. I hope that, in replying to the debate, he will address the crucial aspects of aviation.
	I am also grateful to the noble Lord, Lord Bradshaw, who made a typically thoughtful speech. He always speaks so well on railways but this evening I was very grateful to him for being the only contributor to mention buses in any depth. The Labour Party is concerned about the future of bus transport in this country because it is by far the most critical form of transport available to the least well off in our society. The least well off will have to sustain the impact of the reductions in benefits and support systems that have already been heralded, and if bus services are withdrawn that burden will also be borne by them.
	We have our anxieties. After all, it was clear during the election that the Conservative Party took an entirely opposite view from its Liberal Democrat coalition friends. No doubt some form of reconciliation will be worked out at some point during the coalition, although I have not seen much sign of it yet. It was clear during the election that the Conservative Party was against the continuation of bus quality contracts, yet there cannot be a single contributor to this debate who is not aware of the anxiety across the country about bus services. I mention one area alone on which I have received representation. There are great anxieties that Arriva, with its new bus programmes and schedules, could cause very real difficulty for Milton Keynes, whose structure depends on buses for effective movement across the city. Not everyone has access to a motor car, and it is just as well that they do not. The noble Lord, Lord Teverson, emphasised transport and climate change. If we increase road transport-by that, I mean cars-to make up for the loss of buses, there will be a severe deterioration in our prospects of reducing carbon levels. Very important questions need to be asked about buses, and I hope that the noble Earl will give us some assurance in his response. If the Government intend to remove bus quality contracts or to ensure that no further contracts are established, will he indicate how bus services will be sustained in the localities where they are very much needed?
	The second great issue emerging from the debate-I pay great tribute to the Liberal Democrat coalition Benches here-was the need to separate out some necessary cuts in public expenditure. We all recognise the driving force of the necessity for cuts but we are concerned to ensure essential long-term investment. Without that, we will have no possibility of delivering the rail system that has been rightly identified on all sides as an important contributor to the transport system of the 21st century. We cannot deliver that rail system without the necessary investment. That means choices, of course, but there is concern about electrification, which must go ahead, as the noble Lord, Lord Bradshaw, emphasised in his contribution. It also means the HS2-the high speed rail system. It is important that the Government are called on that issue. I know that there are general expressions that nothing has been abandoned yet, but neither has there been the slightest evidence of any action that would suggest a government commitment to high speed rail.
	A number of other issues were raised. I know that the noble Earl, Lord Attlee, began the debate by emphasising road safety. As a former president of RoSPA, I took that almost as a personal compliment and raised my hat to him, metaphorically at that stage-it has to be metaphorical even at this stage as I have not brought my hat with me. A number of other noble Lords, including my noble friend Lord Simon and the noble Viscount, Lord Falkland, emphasised road safety. It is important that the Government pay due attention to that. No huge expenditure is needed to effect improvements, and some clear ideas were suggested in the debate. I have to say that for the noble Earl to make road safety the top priority in his opening remarks might look to some of us, perhaps suspiciously, as a slight cloud to cover the inadequacies of the Government's proposals on other more critical issues.
	It is quite clear that rail is all about investment. My noble friend Lord Snape raised the issue, the noble Lord, Lord Bradshaw, emphasised it, and my noble friend Lord Berkeley, with his vast experience, suggested that the Government should look closely at the question of governance. I know what the Government are doing now; they are considering how Network Rail can affect economies. That is no bad thing; I will not criticise the Government for starting at that point as long as they consider more than economies, not just how they can lop a few token thousand pounds off some bonuses and pretend that something is being achieved. My noble friend and the noble Lord, Lord Bradshaw, emphasised the effectiveness of governance of the railways. That needs to be addressed.
	I hope that the noble Earl, Lord Attlee, will again recognise that we addressed the issues through Network Rail after inheriting an absolutely chaotic system from Railtrack. It is clear that through experience we have seen areas in which Network Rail is not working as efficiently and effectively as it needs to, and I hope that the noble Earl will address himself to that.
	I hope also that he will consider the rather more different perspectives that were expressed in the debate. My noble friend Lord Liddle indicated the significance of the national parks, particularly in Cumbria and the Lake District. They are concerned about the extent to which their beauty and the very thing that they seek to protect is being threatened and partially destroyed by an excessive amount of road traffic from people going there to appreciate them.
	On road pricing, the nettle must be grasped at some stage. I know that the Conservative Party in opposition had to defend Chelsea and Kensington-after all, a vast number of representatives of their position in this House live in Chelsea and Kensington. I am therefore not at all surprised that it was concerned about congestion charges there. However, if the Government think that we can address road transport issues in the longer term without making progress on road pricing in areas of intense congestion and on the overuse of the motorcar in areas that need protection, they will not be as farsighted as they ought.
	There is a range of issues for the noble Earl to address, but he did not take on his role expecting an easy ride. He will certainly not get an easy ride from his noble friend Lord Falkland, who will continually berate him on uneasy rides on two wheels, whether they are cycles or motorbikes. I know that that will be raised in future debates.
	Foreign trucks were mentioned again today, and the issue of road pricing ought to commend itself to the Government and be examined. We were concerned about the extent to which those trucks do not meet safety standards, but there is also the question of whether foreign heavy lorries ought to meet their proper costs when using British roads. I hope that the noble Earl, Lord Attlee, will address himself to those more distant issues.
	Another important issue that may not have been entirely anticipated-that is, until we saw the noble Lord, Lord Greenway, on the speakers list-was marine traffic. I am today in a blissful position on the opposition Front Bench of not having to answer his five questions. It is the responsibility of the Minister to identify marine transport and trade issues and to respond to them. None of us should underestimate their significance to the British Isles, and although the noble Earl may not have time to address himself to every single point in his wind-up speech-I know how difficult that exercise is-I hope that he will at least write to the noble Lord, Lord Greenway, with answers to his questions.
	This has been a fascinating debate and I await the Minister's response with the greatest of interest.

Earl Attlee: My Lords, first, I thank all noble Lords for their kind words about my new appointment. We live in a country with a proud transport history, where for generations a network of canals, rail, road and international gateways have underpinned the strength of our economy and the freedom of our society. I am extremely grateful to all noble Lords for their contributions today. Without exception, they have been thoughtful and interesting, and valuable to me. I have long been a strong believer in the potential of transport, and I am honoured to be able to initiate and respond to today's debate. This is the first debate to which I am responding for the Government, so I hope that noble Lords will forgive me if there is any room for improvement.
	I see my role as representing and answering for my department in the House of Lords and, most importantly, drawing your Lordships' views to the attention of relevant Ministers. We are fortunate that my right honourable friend Mr Philip Hammond, the Secretary of State, is already providing clear direction and strong leadership in the running of the department. We have always enjoyed robust and constructive debate on transport matters in this House, and we are passionate about safety. My right honourable friend has made it clear to me that he values our views and that he expects me to articulate them, as appropriate, at ministerial level. That is one reason why this debate is so important. I assure noble Lords that I will personally review Hansard over the next few days.
	Noble Lords have already privately been making very helpful suggestions about how to secure best value for limited funds while avoiding the trap of special pleading. Every area that we ring fence or protect will mean greater reductions elsewhere-I am sure that all noble Lords understand that.
	The noble Lord, Lord Snape, referred to my note to him. If the result is a speech of the value and quality that he made, I will invariably write to him when I initiate a debate. The noble Lord, Lord Davies, talked about the coalition. I attend ministerial meetings several times a week and I can assure noble Lords that they are very good and benefit the coalition.
	Spending cuts are obviously difficult. We are in the early stages of a new Government, and Ministers are considering the full range of transport policies. In the coming spending review, we will be adopting a rigorous approach, reviewing all the department's projects and programmes to ensure that they represent value for money and are consistent with the Government's objectives, including the need to reduce the deficit.
	Many noble Lords talked about Network Rail. It is vital that Network Rail's governance structure enables the company to work effectively on behalf of passengers, freight customers and wider industry stakeholders. Only an accountable and responsible infrastructure operator, one able to offer the best possible results for both operators of rail services and their users, can enable a modern, 21st century railway network. We are thus examining the current structures and incentives of the industry to see where there is room for improvement and where more accountability is needed. Of course, the McNulty report will help. The needs of passengers must be at the heart of the UK's railway. The independent Office of Rail Regulation, which already oversees the safety and efficiency of the railway, is well placed to promote the interests of Network Rail's customers, and we will work with ORR to explore how it might require changes to make Network Rail more responsive to the needs of both passengers and train operators. As the 2010 annual report and accounts of Network Rail demonstrated last month, it is all too clear that the best performing train is the gravy train of Network Rail.
	Turning to franchise reform, my right honourable friend Theresa Villiers announced on 17 July that the Government had launched a franchising policy review. That resulted in the cancellation of two outstanding competitions, Greater Anglia and Essex Thameside. A consultation will be launched later this month, and will focus on coalition agreement priorities, such as increasing franchise lengths and giving operators incentives to invest. The conclusions of the consultation will be announced at the end of the year.
	Many noble Lords have talked about high speed 2. The Government propose to establish a national high-speed network as part of our programme of measures to create a low-carbon economy. Given the cost and scale of such a network, the Government recognise that it will need to be achieved in phases. Demand for travel between major British conurbations is expected to increase significantly over the next 20 to 30 years, leading to severe congestion and overcrowding on our existing systems. The previous Government therefore set up HS2 in January 2009 to look at the feasibility of and the business case for a high-speed rail line between London and the West Midlands. It also considered high-speed services linking London, northern England and Scotland.
	The noble Baroness, Lady Thomas, talked about the condition of local roads and related issues. I read the ICE report State of the Nation and the markings for local roads were not good. The Government have confirmed that the £84 million announced in the Budget in March for repairs to local authority roads in England, following the damage caused by last winter's severe weather, is not part of the £683 million in savings. It is for each local highway authority to decide how best to use that money, but Department for Transport officials wrote to each authority in March emphasising the need to consider using long-term treatments rather than ad hoc patching.
	The noble Lords, Lord Teverson and Lord Rosser, talked about electric vehicle infrastructure. In our coalition agreement, we are committed to mandate a national recharging network for electric and plug-in hybrid vehicles. Detailed planning work will need to establish how many charging points and what type of technology will be necessary to achieve that commitment. Understandably, motorists fear not being able to recharge away from home, but the reality is that most journeys will not require a recharge because they are so short.
	Many noble Lords, including the noble Lords, Lord Rosser, Lord Clinton-Davis and, particularly, Lord Davies of Oldham, talked about Heathrow, Gatwick and Stansted. In addition to our commitment in the Queen's Speech to reform the economic regulation of airports, in a Written Ministerial Statement on 15 June, we announced the creation of a taskforce made up of key players from across the industry. Their remit will include identifying and investigating options for making the best use of this capacity, including the scope for improving airport efficiency, reducing delays and enhancing the passenger experience. Our plans for a national high-speed rail network linking our major cities and including links to Heathrow and, potentially, other airports, could provide passengers with an alternative for many short-haul journeys, which would ease some of the pressures on airport capacity. Heathrow will continue to be our international hub airport, with particular focus on long-haul operations, but our judgment is that the environmental impacts of a third runway, both local and global, are simply unacceptable. Our priority is to develop sustainable growth in a low-carbon economy less reliant on aviation. A key element will be promoting high-speed rail which offers an alternative for many short-haul flights.
	The noble Lord, Lord Clinton-Davis, talked about the problem of volcanic ash. With regard to ash and aviation, safety is obviously paramount. In response to this unprecedented volcanic ash situation, aviation authorities followed clearly established international protocols. The whole of Europe has been in the same position acting according to the same aviation safety rules ensuring that safety was not compromised while uncertainties remained about ash concentrations. Europe's initial reaction to this unprecedented volcanic ash situation was to follow established international guidance based on experience that aircraft should avoid encounters with volcanic ash. The Government and the Civil Aviation Authority continue to work with the industry to facilitate work on this programme.
	The noble Lord, Lord Clinton-Davis, talked about aviation growth outside the south-east. We have not yet decided on airport expansion at airports other than Heathrow, Gatwick and Stansted, but have created a task force, chaired by my right honourable friend the Aviation Minister and made up of key players from across the industry to develop a fresh approach to making best use of existing infrastructure and to improve passenger experience.
	The noble Lord, Lord Greenway, in his interesting speech, talked about the problem of equal pay in the shipping industry. The European Commission's view is that Section 9 of the Race Relations Act 1976, which currently allows seafarers on UK flagged ships to be paid differential rates of pay according to their nationality, is in breach of European law. We agree that Section 9 is in breach and propose to use a regulation-making power within the Equality Act 2010 to correct the position. We are aware of the possibility that some ship owners may flag away from the UK if differential pay is outlawed and there remains the option of allowing differential pay for non-EEA nationals if the Government wish to do so. We are aware of the serious concerns of interested parties and are anxious to test the arguments and evidence before reaching a conclusion.
	The noble Lords, Lord Rosser and Lord Berkeley, and the noble Viscount, Lord Falkland, talked about cycling. The Government are keen to promote sustainable travel, including cycling and walking. Future central government spending decisions on walking, cycling and sustainable travel initiatives will be part of the spending review, but local authorities are still able to fund such initiatives through their grants from central government. The noble Viscount, Lord Falkland, asked about the safety of cycling. I have to tell your Lordships that I was first on the scene of a very serious accident involving a cyclist and a lorry. There are a number of initiatives under way at present aimed at improving cycle safety, including the promotion of Bikeability, cycle training, promoting the Highway Code and safe road use, providing more safe cycle routes and guidance to local authorities on the design of safer road infrastructure, improvements to motor vehicle driver training and testing, and new measures on lorry mirrors to improve the visibility of cyclists and pedestrians. The noble Viscount also talked about motorcycle testing. He will be aware that my honourable friend Mr Mike Penning has instigated a review of this.
	The noble Lords, Lord Clinton-Davis and Lord Berkeley, and the noble Viscount, Lord Simon, and others referred to the North review. Sir Peter North's report covers a wide range of issues that we need to consider carefully with other government departments. In doing so, it is important that we investigate fully the economic impact of any suggested changes to the law, taking account of the current financial and economic situation. Our priority will be to tackle drink and drug driving in the most effective way possible to protect law-abiding motorists. We will respond to Sir Peter's report in due course and I look forward to reading it carefully during the Summer Recess.
	The Government have made a clear commitment to introduce devices for drug driving. The law does not need to be changed to permit screening either in a police station or at the roadside, but does require devices to be type approved by the Home Office. We hope to see a specification published before the end of the year so that devices can be assessed against the required standard. If devices meet the standard, or can be adapted quickly to do so, it may be possible to have drug screeners in police stations within a year or so.

Lord Berkeley: I thank the noble Earl for allowing me to intervene. Can he explain what the economic benefit is if 200 fatalities are avoided each year when the drink drive limit comes down? I do not quite see the link between the economics and death.

Earl Attlee: My Lords, there are considerable costs involved in implementing Sir Peter's report, particularly in terms of court time, the whole of the offender management system, and the result of banning people from driving when they are not currently being banned. There could be unintended consequences. I suggest that, as I will do, the noble Lord reads the report very carefully.
	The noble Lord, Lord Berkeley, raised the issue of speed cameras. We recently announced reductions in local government funding, and road safety funding will contribute £38 million to the savings of £309 million from transport. It will be the responsibility of local authorities to decide how to manage these budget reductions in a way that will allow continued delivery of local priorities. The reduction in the road safety grant does not indicate a reduction in the importance that the Government place on this crucial area. We remain strongly committed to road safety, recognise the importance of local activity and therefore expect safety spending to remain a priority. That is precisely why we have recently written to local authorities asking them to continue to focus on and invest in road safety. As the noble Lord, Lord Davies of Oldham, pointed out, it is not particularly expensive, but leadership and guidance are necessary.
	The noble Lord, Lord Davies of Oldham, and others referred to buses. The Government acknowledge the importance of good local bus services in providing access to facilities and employment opportunities, particularly for those without access to a car-a point strongly made by the noble Lord, Lord Davies. We are committed to encouraging partnerships between bus operators and local authorities to improve these services. At the same time, there is huge pressure on the country's finances and bus services must be economical. We are determined to get value for money from bus services supported by the public purse.
	On the question of quality contracts, yes, they are in place. As the guidance related to quality contract schemes has been published in full, local transport authorities are perfectly entitled to consult residents on their plans to make use of the new regulations to improve local bus services for passengers as they see fit. The Government are waiting for the outcome of the ongoing inquiry into the local bus market before making any decisions on whether changes are needed to the current regulatory framework for bus provision.
	The noble Lords, Lord Teverson, Lord Liddle, Lord Bradshaw and Lord Davies of Oldham, asked about road charging. The coalition agreement states:
	"We will work towards the introduction of a new system of HGV road user charging to ensure a fairer arrangement for UK hauliers".
	The Secretary of State has ruled out for the duration of the Parliament national road pricing for cars on existing roads and any preparation for such a scheme beyond that time horizon. Details of how a national HGV road user charging scheme could operate and the delivery timescales are being actively considered. Any compensation mechanism for UK hauliers is for Her Majesty's Treasury to decide.
	The noble Lord, Lord Bradshaw, raised the issue of NATA, a subject which is very important to him. As noble Lords are aware, the coalition agreement of the Government promised to,
	"reform the way decisions are made on which transport projects to prioritise, so that the benefits of low carbon proposals (including light rail schemes) are fully recognised".
	We will in due course consider to what extent the NATA framework should feature in this, alongside other inputs to prioritisation decisions.
	I hope I have satisfactorily answered all the questions. Where I have not, of course, I shall write to noble Lords. We have heard many points of view, a lot of which I agree with and some of which provide me with food for thought. However, there is one thing above all on which we can agree: only through securing a system of safe and sustainable transport can we be confident of generating future economic growth and prosperity tomorrow.
	Motion agreed.

State Pension Credit Pilot Scheme Regulations 2010

Copy of the SI
	11th Report form the SI Committee
	16th Report form the Merits Committee

Motion to Approve

Moved By Lord Freud
	That the draft regulations laid before the House on 10 March be approved.
	Relevant Documents: 11th Report from the Joint Committee on Statutory Instruments, Session 2009-10; 16th Report from the Merits Committee, Session 2009-10.

Lord Freud: My Lords, I confirm that in my view the statutory instrument is compatible with the European Convention on Human Rights.
	Britain used to have a pensions system to be proud of but, due to years of neglect and inaction, we are left with fewer people saving into a pension every year, and the value of the state pension has been eroded, leaving millions of people in poverty. We are taking action to address that and will deliver on our responsibility to reinvigorate the pension landscape. But too many of today's pensioners are already paying the price exacted by allowing the value of the basic state pension to be eroded over time.
	We will halt that decline by ensuring that the basic state pension rises in line with whichever is the greatest of earnings, prices or 2.5 per cent. But for those who are already paying the price-those who have been let down by the pensions system-it is absolutely critical that they get the help that is available from pension credit.
	Pension credit means that no pensioner needs to live on less than £132.60 a week-or £202.40 for couples. Those with severe disabilities, caring responsibilities and/or qualifying housing costs may be entitled to more. But, like other social security benefits, pension credit has to be claimed, and we know that significant numbers of pensioners are not getting the help that they are entitled to.
	Latest figures show that some 2.7 million pensioner households, which equates to 3.3 million individuals, are in receipt of pension credit. However, it is estimated that more than 1 million pensioners could be entitled to the benefit who are not claiming it. Research shows that this is due to a range of factors. Predominantly, these include pensioners incorrectly thinking that they are not entitled to any help. Others are reluctant to go through what they see as a demeaning means test whereby they are required to open up their bank books to the state to verify the details of their personal finances. This is in many ways unsurprising. Due to what my honourable friend the Minister for Pensions has called "the curse of incrementalism", the system of support for older people in this country has under successive Governments become one of Byzantine complexity. Although pension credit can be claimed with one simple telephone call, it cannot surprise us that many older people are bewildered by the system and that many still do not claim what is rightly theirs.
	It is quite clear that we have to explore new approaches, but we have also to be sure that taxpayers' money is properly targeted. For some time, lobby groups such as Age UK have argued that we have all the information that we need to do away with the need for pensioners to make claims at all, and to make automatic payments.
	Data that we already hold about people's financial circumstances have been used to help target take-up activity. However, this information is not specifically collected to decide entitlement to income-related benefits. The indications are that the department is not yet in a position to estimate entitlement with sufficient accuracy to offer a fully automated pension credit payment system now. Indeed, I think it has been generally accepted that the study that we are now planning to conduct is not intended to see whether a system of automatic payments can be rolled out in the near future. The previous Minister of State for Pensions acknowledged this when she said, in reply to a Question, that the previous Government had,
	"no current plans to introduce wholesale automatic payments of pension credit".-[Official Report, Commons, 21/7/09; col. 1316W.]
	I am not interested in what we cannot do, but rather in what we may be able to do by using more effectively the information that is already available to us. We need to start from somewhere, and this study will help us to understand what might be possible in the short to medium term. It will help us to explore what opportunities there are to use data more innovatively to drive take-up in the longer term, while ensuring that, in this difficult economic climate, taxpayers' money continues to be properly targeted on those in the greatest need.
	We therefore propose to take forward a modest research study later this year in which awards of benefit will be made for a limited period of 12 weeks to a random sample of some 2,000 pensioners resident in Great Britain based on the information that we already hold and without the need for a claim. The study is being designed with a view to meeting the following objectives: to provide information about how a system that makes more use of personal information that the Government already hold to pay people pension credit might be received by potential recipients; to evaluate ways of using the data available to us to improve take-up under the present pension credit regime; and to deliver evidence about how, in the long term, a reshaping of the benefit or acquisition of better data might enable us to radically streamline the process for awarding pension credit. On the study's conclusion, there will follow an extensive and detailed evaluation of the pilot to see how it has delivered against those objectives.
	The regulations make provision for the study. In particular, they set out the provisions for identifying potential participants, calculating the amount of any benefit payable and the manner of subsequent payments. We have spotted that the reference to the regulations coming into force should be in accordance with Regulation 1(2) and not "2(2)" as drafted. That typographical error was noticed after the regulations were laid. While it makes no difference to the content or the effect of the regulations, I assure noble Lords that we will of course amend the reference prior to publication.
	The development of these draft regulations has involved the ongoing input of a number of external stakeholders such as Age UK, to name but one. However, I express my gratitude to all those who have been involved in getting these regulations into the shape we see before us today. I commend them to the House.

Lord Kirkwood of Kirkhope: My Lords, I am grateful to my noble friend for introducing the regulations. It comes as no surprise to those of us who served on the Committee for the proceedings of the Welfare Reform Act 2009. Section 27 presaged the Motion tabled by my noble friend Lord Freud this evening. To that extent, it is business as usual.
	These are interesting regulations, for a number of reasons. I would like to use the context of this evening's debate to raise one or two issues. It is a tactical provision and an important piece of legislation for a number of reasons that I will come to the moment in terms of how it widens the extent of well understood and well honed social security tenets of legislation.
	It is tactical because it seeks to underpin the concept of means-testing. In so far as that gets more money into pensioner households which are eligible and which are not claiming, that is welcome. But at the outset of this Government, if we are looking in the long term and thinking strategically, is more efficient means-testing what we are really trying to be about? That is an important strategic question.
	It is early days for the new coalition Government to come to a final conclusion about that, but we are beginning to run out of time on a wider horizon. If you look at the proposals that were contained in the Turner commission some years back, the understanding that the noble Lord, Lord Turner, had when he made his recommendations was that there would have been more discernible movement by now in the direction of a universal basic state pension, which produced a threshold of earnings, such as 30 per cent of average earnings. It would be a base; a first-tier provision on which other things could be built. We are not getting there fast enough.
	This is a limited project both in terms of time because it will run for a 12-month period, and in terms of scope, because we are devoting only £1 million of the DWP departmental expenditure limit-although that is £1 million not available for other things in very trying circumstances over the next comprehensive spending review.
	We have got to think carefully about the signal that this is sending. We have to ask whether it is credible, even if this pilot is swimmingly successful, that the 70 per cent of pensioner households which do not currently get the entitlement which they are due suddenly become, as if by magic, able to get this automatic payment after a deemed application. Where does that take us? All it does is encourage people to think more about means-testing. If that is the long-term goal, I would be much happier if we were to think more carefully and strategically about developing the basic state pension in a sustainable way.
	The State of the Nation report, which was helpfully produced by the department just after the election talks at page 38 about the disincentives to save that can be created by means-testing. It refers specifically to pensioner credit in that regard. Although this is a very limited project-it pays benefit automatically for 12 weeks to families and the Pensions Policy Institute certainly suggests that as things stand 30 per cent to 40 per cent of pensioners will be eligible for pension credit and means-testing in the future-we have to bear in mind that this may be a project that ends up being of little value if the strategic decision is to go in the other direction and to head down a unified first-tier pension provision which gives a sustainable income for pensioner households.
	It is an important signal in that you could raise expectations in the minds of pensioner households that this would be the way forward and that they would be sent money through the post. I do not think that we can do that. Looking at the financial framework that we are facing for the next three years, I do not think it is realistic that the department could find the money out of the annual managed expenditure of the departmental settlement-whatever it is-on 20 October. If this pilot is successful and a way to automatically send pension credit to pensioner households is found, it could cost £5 billion. I will put it no higher than this, but I doubt that there is £5 billion in the annual managed expenditure of the budget over the next comprehensive spending round to pay for that. We need to be very careful about how we evaluate this, how we sell it and how it fits into the long-term strategy of the coalition Government.
	As I said earlier, deeming applications to have been made is a substantial revision of social security law, as is the automatic payment. The idea that people can be sent money in the post without having made an application in the first place is a radical departure from everything that we know and it needs to be treated with very great care.
	I hope that my noble friend will look very carefully at the use of pilots. Perfectly understandably, he is still finding his way around the department. I do not say this critically because most of the pilots had a merit in their own right when looked at individually, but over the distance they became completely incoherent. It was impossible for observers to track the evaluation and what happened to them. I suspect that many of them bit the dust quietly. The whole notion of "pilotitis" was getting out of hand in the previous Administration. I am just warning my noble friend that the department might encourage him to do that. He has to be very stern and very sure that if he introduces pilots he really means them. He must take the value out of them and make sure that they are not just a waste of time for everyone involved.
	Staff resources will be involved because it is complex. I am absolutely sure that my noble friend is right. Trying to stitch together the bits and pieces of data that are available legitimately and lawfully to the department in order to establish who will get these automatic payments will not be easy. If anyone is unsure about that, they should look at parts 4 and 5 of these regulations which have completely separate definitions for income and earnings that have to be laid on top of an already complicated situation. People will have to do staff training to carry out these pilots, which will be random across the whole of the United Kingdom. Only 2,000 people will be involved, but that does not mean that a whole lot more people in the staff complement will not need to know about these things. There may well be a single helpline telephone number, which I would welcome. People will need to know how to deal with folk who ring up and say, "I have just been sent a lot of money by the department in the post. What is all this about?". I know that a lot of care is being taken over getting the letters of explanation correct and I welcome that, but there are staff resources involved in this and it will involve complexity of some kind.
	On the operational questions, a lot of the problems have been ironed out in the extensive consultations that have been conducted. I welcome that. I recognise too that the stakeholders who have been asked are a lot more welcoming to the order than I am sounding today. However, there are still some questions in my mind. For example: why is this money being paid for only 12 weeks, monthly in arrears? Did someone guess that, or is there a reason for having 12 weeks of payments and then they stop?
	A second question that is obvious but to which I think I know the answer is that if an underlying entitlement is detected from this automatic payment, presumably people are entitled to pursue that genuine entitlement. Once week 13 comes along and the money stops coming, they can go to the Jobcentre or phone the Pension Service and get a proper claim. I assume that that is axiomatic and will not be a bar to long-term entitlement, if entitlement is indeed found.
	I have a slight objection to the pilot excluding people who do not have access to direct credit. The people with bank accounts are the people who are organised; the people who we are trying to help most are the folk who do not have bank accounts and are still using alternative means. Now, there are not many of them, and statisticians may say, "If you take too many of them into the pilot, that may skew the pilot", but some of them should be in the pilot to draw statistical conclusions from, because there are still significant numbers of people in that category across the United Kingdom.
	Why we are excluding religious orders is an interesting question. "What have we got against monks and nuns?" I ask myself. I have no way of understanding that, except maybe that they live in a residential setting.
	May I have an assurance, just for Daily Mail purposes, that this money will not be sent to people in Spain? I think that regulation 10 means that people in Spain will not be sent cheques automatically, having been deemed eligible for pension credit, because that would be in nobody's interests.
	I hear myself sounding quite niggardly about this, but there are some important issues here that I hope the Government are thinking through. My question to my noble friend is this: "Is it really credible to say that this pilot is determined to achieve an algorithm that will produce automatic payments of pension credit in future to the 30 per cent of pensioner households that are not currently collecting it because they do not know that they are entitled to it and that we have the money to pay for this in the short to middle term?". That is an important question that the Government need to think about carefully before they implement these pilots.

Lord McKenzie of Luton: My Lords, I thank the Minister for his explanation of the order before us. I will not rise much to his opening salvo about the state pension, except perhaps to remind him gently that it was a Conservative Government who broke the link with earnings, and it was the previous Labour Government who, on coming into office, had to address the abject situation that many pensioners found themselves in, hence pension credit. That is how the previous Government lifted hundreds of thousands of pensioners out of relative poverty. Perhaps, though, that is for another debate.
	It goes without saying that we support the pension credit pilot, which, as the noble Lord, Lord Kirkwood, acknowledged, has as its basis the provisions of Section 27 of the Welfare Reform Act 2009. Maximising the take-up of income-related benefits is an effective way of tackling pensioner poverty. We know that, despite considerable take-up activity, a significant number of people who are entitled to pension credit are still not claiming it.
	The noble Lord, Lord Kirkwood, said that the regulations are, in his view, basically tactical in enshrining means-testing as part of the system. I remind him that the package on which the pensions system is based stems from the Turner commission: improvements to the basic state pension, relinking it to earnings, and improvements to S2P, particularly the flat rating. The other component is, of course, auto-enrolment, on which we await the results of the review that is under way. My noble friend Lady Hollis, who is not with us today, has strong views about wrapping pension credit, S2P and the basic state pension into one pot.

Lord Kirkwood of Kirkhope: I have said that, too.

Lord McKenzie of Luton: Indeed, among the advocates of that I include the noble Lord and possibly even the Pensions Minister, although we shall see what will flow from that.
	We note that the limited consultation that the DWP undertook before the election showed general support for the pilot, although, as ever, with some reservations. Clear communications are, as the DWP's response to the consultation acknowledges, of paramount importance. We are likely to be dealing with many people who are vulnerable and who could be distressed at seeing ad hoc credits appearing on their bank statements.
	A condition of eligibility of receiving benefit under the pilot is that a person must receive retirement pension that is paid by way of direct credit transfer to a bank or other account, a point that the noble Lord, Lord Kirkwood, probed. I am not sure whether the Minister has information to hand-if not, perhaps he could write-but we would be interested to know what percentage of people in receipt of retirement pension are now paid other than by these means. Are there data covering the extent to which such people are underrepresented or overrepresented in the entitled non-recipient category? We ought to know that.
	The noble Lord, Lord Kirkwood, also touched on a question that arose about the design of the pilot, which involves the payment of just three four-weekly amounts. Is that sufficient to provide the information to satisfy the objectives of the pilot? Given the set-up costs of the pilot, it would be a pity if the opportunity were missed to provide a secure evidence base. On what basis is the Minister satisfied that the three-month period is sufficient to meet the objectives for which the pilot is designed?
	The pilot is to cover both the guarantee credit and the savings credit, so the spread of amounts of payments could be quite wide. Is the Minister also satisfied that the proposal to select 2,000 at random from the entitled non-recipient population will pick up a sufficient range of circumstances to enable a comprehensive evaluation of the differing reasons for lack of take-up?
	Of course, the pilot has to be seen in the context of other campaigns that are under way to improve the take-up of benefit. Perhaps the Minister could give us an update on these. Specifically, could he tell us about the outreach programmes and the current volumes of face-to-face visits that are being undertaken? What progress is being made on the programme that allows one phone call to access three benefits-pension credit, council tax benefit and housing benefit? Will this continue alongside the pension credit pilot payment?
	The noble Lord will recall our deliberations towards the end of the Welfare Reform Bill on the renaming of benefits and the campaign by the Royal British Legion to improve the take-up of council tax benefit by designating it as council tax rebate. If memory serves, we had common cause on this; the noble Lord indicated that it had the support of his party, particularly the now Prime Minister. Will the Minister tell us what progress has been made on this and the current timetable to bring it to completion?
	The relationship between pension credit and housing and council tax benefit is important. I understand, for example, that no capital limit is applied to the latter two if a person is in receipt of the guaranteed credit. Both elements of pension credit can be the passport to social fund payments, both discretionary and regulated. Do the amounts paid under the pilot not count for these passporting purposes? If this is the position, is there a risk that, by claiming housing benefit separately during the course of the pilot and/or refraining from claiming pension credit until the end of the pilot period, an individual might miss out, albeit for a short period?
	We welcome the pilot. As I have said, it is another means of improving the take-up of pension credit. It is encouraging to see it move forward, notwithstanding the more disagreeable rhetoric that typically emanates from this coalition Government around the welfare system, focusing on fraud and error and itself creating a climate that will deter some people from claiming their just entitlement. This is all against the backdrop of draconian cuts to be visited on government departments and local authorities, with knock-on effects for the voluntary and third sectors-collectively, the support system for helping the most vulnerable to obtain their rights. It is to be hoped that the benefits of this pilot will not be swept away in the deluge of cuts, which would impair the functioning of those whose efforts are directed at helping the poorest and most disadvantaged.

Lord Freud: My Lords, this has been an interesting debate. Several points have been raised, which I will endeavour to respond to. I start with the question of my noble friend Lord Kirkwood on means-testing and the signal that it gives out. Whatever system we end up adopting-whether we go for a higher basic pension, as he suggested he supported, or stay with means-testing-there will always be the need for some sort of safety net, given that it is a contributory system. That does not send a message that the Government want more means-testing at the heart of their vision. Nevertheless, it remains the case that we want to ensure that pensioners get what they are entitled to.
	The noble Lord asked this pointed question: if there are no plans to roll the system out nationally, what is the point of spending a goodly sum, £1 million, in the present climate? When you look at the scale of the problem, with 1 million pensioners not getting the help that they are entitled to, despite the efforts of PDCS and third sector organisations, we need to think innovatively. Clearly, we are not in a position to roll out a fully automated system today, and we need to build up the evidence base to establish what kind of information we need to get people more of the help that they deserve. The cost of the study was queried by my noble friend Lord Kirkwood. The current revised estimate of the cost of the whole study is £800,000.
	Will we have the necessary information to evaluate at the end of the study? There are several elements to the evaluation. We will be asking a sample of the customers to participate in a face-to-face interview and using research contractors who know how to encourage participation. The interviews will be carried out in the place most convenient to the participants-probably in their own homes. Then we will track the take-up of the pension credit of people who have participated in the pilot. Those data are gathered automatically as part of the administrative system. Finally, we will gather the claims data from those who claim pension credit as part of the pilot. Again, that will be done via our own systems.
	Homing in on the point on which I touched just now on national rollout, there are no plans for a national rollout. This is a study to help build the evidence base to see what we may be able to do in this area in the future. The complexity and the staff training required are not as daunting as my noble friend Lord Kirkwood suggested. The study will be run by a centralised team rather than small groups across the country. The definitions of income and capital are very much based on the definitions used in standard pension credit. If there are any changes, these will be introduced to make them simpler. We do not have any concerns about our ability to train staff to administer these payments effectively.
	My noble friend mentioned the Daily Mail in connection with possible stories about lots of money whizzing off to the Costa Brava. The pension credit is not an exportable social security benefit. Therefore, I assure him that we will select people to take part only if they are resident in Great Britain.
	The noble Lord, Lord McKenzie, asked about process. Pensioners can claim housing benefit and council tax benefit alongside pension credit in a single phone call without the need for a signed claim form. Their calls to the 0800 claims number from a BT landline or from the six largest mobile phone networks are free. The noble Lord asked whether 2,000 was sufficient as a sample size. We are confident that 2,000 participants will deliver a sufficient range of circumstances to build a meaningful evidence base. He asked about recovery of money in different ways in terms of the interplay with other claims. I make it absolutely clear that under no circumstances will anyone receiving a payment under these regulations be asked to repay a penny. We will make sure that participants in the study are made fully aware of that fact.
	Both the noble Lord and my noble friend asked about the 12-week length of the pilot. It was important to balance two factors; namely, to make the pilot long enough to collect enough meaningful information and to protect public funds which are in short supply. The determination is that 12 weeks is a reasonable compromise between those two objectives.
	The noble Lord, Lord McKenzie, asked about passporting and the exclusion of housing benefit and council tax benefit, as it is called at the moment. If we had added in those two benefits, it would have added a significant level of complexity and cost to the pilot. From the outset it was never the intention that the interaction between pension credit and housing benefit and council tax benefit should be factored into this study. Clearly, we expect to learn more about issues such as people's attitudes to receiving automatic payments of benefit, which may have wider application to other benefits such as housing and council tax benefits.

Lord McKenzie of Luton: Perhaps we can just be clear on this fairly narrow point. If somebody in receipt of payments under the pilot refrains during that period from making a claim for pension credit, is there a risk that they could be disadvantaged? If they have a claim for pension credit, I think it will open up some passporting opportunities. I was probing whether that passporting will exist in the interim if a payment is made under the pilot which is not the result of an actual claim to pension credit at that stage.

Lord Freud: I thank the noble Lord for that question. I will go back and double check this, but my understanding is that this pilot is entirely separate from any other activity. If an application which took in the passporting opportunities was made in the normal way during this pilot, there would not be a countervailing claim on the money paid by the pilot.
	I have just received some support, for which I am more than grateful, confirming my understanding-it is therefore more than my understanding. The position is that there is no risk of disadvantage. If someone claims pension credit, they will get the full claim plus any passporting money, in addition to the pilot funds.
	I turn to the question raised by my noble friend and the noble Lord on how many pensioners are paid directly into a bank account. More than 90 per cent of pensioners receive their pensions through direct payments into either a bank account or post office account. I refer to the standard pension to which they would be entitled. We are talking about a small group who do not receive their payments in that way.
	I shall write to the noble Lord on his question about the number and content of visits to customers to encourage their take-up. I do not have that information to hand.
	Let me draw my remarks to a close. The research study, through these draft regulations, will allow us to explore what potential exists to use data more effectively to improve the take-up of pension credit, to make more automatic awards of pension credit in the future when better data are available, or to simplify the benefit rules. Importantly, it would also help to throw light on whether people are happy about personal data being used in this way. I therefore commend these regulations to noble Lords.
	Motion agreed.

House adjourned at 8.43 pm.